Business Plan With a Vision

New businesses are started everyday. But what will make your business the one that succeeds? What makes you stand out from millions of businesses hoping to do well? It may be simpler than you think.

Dedication and hard work are mandatory factors in any business. Long hours, solving problems and keeping the clients happy are typical scenarios for business owners. Your business will stand out from all others if you truly have a passion for what you do. Enthusiasm needs to be seen everyday by everyone. It’s catching. Your clients will know how you feel about what you do from the moment of their first dealing with your company. This passion and enthusiasm will flow through to your employees, vendors, clients and future clients. What better referral can you have than from a happy customer delighted to work with everyone involved in your business?

Along with a passion for your business you must have a vision. Put it in writing, illustrate it, feel it and see it. Picture yourself in one year, five years, and beyond. Live your vision. Make everyday a journey in your own personal vision. What is your goal in one year? Do you have a certain dollar amount you want your company to have in revenue. Write it down, post it on your computer screen; know that your vision and goal will happen.

Your vision should coincide with your business plan. Your passion should be felt in your business plan. If you are looking for additional funding for your company your business plan is the first thing a prospective investor will want to see. A killer business plan can remove skepticism in a heartbeat. Prove that you are painstakingly thorough and that you have done your homework about your industry and know what investors value and want to see.

Once your vision is in order be sure to take advice from the experts. Enlist a top of the line team when making your business plan. Know what your expertise is and be open to advice and guidance from those specializing in the details. Every move must be strategically made for you to be that one in a million. Your business plan will stand out from the crowd and make your vision real.

Business Plans – Stop Wasting Your Time!

“Failing to plan is planning to fail!” was a phrase commonly heard as far back as high school when speaking with my career counselor.  As cliche? is the statement is, most business leaders will suggest that there is a great deal of merit to it, to the extent that most business leaders either a) have started thinking about writing a business plan, b) have started writing one or c) have one tucked away on a shelf that they haven’t looked at, ever.

Business plans take too long to write, they are more of an academic process, they are impractical, they are only used to raise money when starting a business and most good business leaders don’t need one, anyway, right?  While there have been many the albatross thrown around the neck of the business plan, we hope to give you new perspective on creating a business plan and hope that you will engage in one for your business.

In this issue of “Had an Aepiphanni, Lately?” we are going to discuss the justification of the business plan, or why the heck we need one, anyway, and how you might implement one into your daily business without it becoming a burdensome exercise.  Topics we will cover include:

The Business Plan: Why?
The Business Plan: Types
The Business Plan: How?
The Business Plan: When?
The Business Plan: Why?

Your business plan is a way to get the idea or vision for your business down on paper in order to determine:

if it makes sense, as in, does it fill a specific want or need and can that need be met, if it is feasible, as in, are there people or businesses who would be interested in buying your product or service at a price that works for you and them explore potential risk, how to avoid some and how to manage others,  costs of starting it and keeping it going and financial outlook.  

Additionally, simply going through the process of building the plan will provide you with a great deal of information you will need while running your business.  Additionally, as the business grows, you will want to use the business plan to help guide you in your future planning and decision-making processes.  Finally, if you expect to raise money using investors – whether friends and family or through venture capitalists, you will need a good, strong business plan.

The Business Plan: Types

The first thing you’ll want to do for your business plan is to determine what it is going to be used for.  Basically, there are four types of business plans:

Startup plans – sometimes this will be more of an overview of the business with expected sales and expenses, discussion about the product or services, the market and marketing.  These plans can be very short (10 pages) and effective for the startup phase of the business.

Operational plans – that focus on how the business will operate, heavily focused on processes, systems and people.  Ideally, cost analysis of the various processes and systems should be included, but often, current financial information and projections are used in the plan.  These can be equated with business architecture and strategic planning.

Presentation plans – these plans are used to attract partners, donors, executive teams and investors.  The key, here, is that this plan is used to attract them. Rarely will they be the final piece of information required.  In this type of plan, we focus on outcomes: the product and why there is a great need for it in the marketplace, what an investment will do to bring the product or service to market and what type of return one might expect as a result of investing or partnering with the company.  It will normally include a lot of visuals and is, essentially, a marketing piece.

Investor Grade Plans – these are the all inclusive business plans that combine all three of the other plans, with the addition of exploring risk.  This is the epitome of a marketing and investing tool that potential investors will try to tear holes in (versus trying to justify) to determine whether or not they will invest.  The executive summary, alone, needs to be powerful enough to engage potential investors to read further.  Financial plans need to extend three to five years.  This type of plan requires the greatest investment in research and financial planning of the four plans.  It will be the authority on operating the business.

The Business Plan: How?

Many people begin their business plans with a simple template.  Templates can be found all over the internet, in books, through SCORE (Service Core of Retired Executives) the SBA (Small Business Administration) and the SBDC (Small Business Development Centers).  You can take courses on how to develop the plan, or you can work with a consultant or business plan expert (Note: I emphasize with. For your business plan to be practical, you need to fully understand what is going into the plan, why it’s there and what to do with it!).  

The most important aspect of the plan, however, is that it needs to work for you and your business.  If you are a visual person, you might create a plan that is pictorially based.  If you are a task-oriented person, you might use bullet points to describe many areas of the business.  If you are a story teller, create a story, first, before even looking at a template.  Templates can be intimidating given all that is required.  Take it one step at a time.

The Business Plan: When?

When?  Your business plan should be your road map.  How often do you look at your road map when you are going somewhere you’ve never been?  Hopefully, you will look before you begin to veer off course.  Does this mean that you need to look at the whole thing, from beginning to end each and every day?  Not practical.  So when do you look at it?

The easy answer is: depends on your industry.

The better answer is – it’s too big to eat all at once.  Just like eating an elephant, you need to break it down into manageable pieces.  That means that you will want to put the marketing plan in one folder, put the SWOT analysis into another folder, your financial information in another, your processes in another, etc.  Your business plan does not necessarily need to be a single three inch thick document.  

With the plan separated, it becomes much more practical to use and update.  You might do marketing every day, but do your SWOT only once a month or once a quarter.  Ideally, you’ll manage your finances regularly and can look, at any time, to see where the business is financially.  As you update any area, stick it in the appropriate area.  Once a year, you may wish to pull out a whole section, or the whole plan section by section to review and make plans for the following year.

In Conclusion:

Your business plan should be a living set of documents that can be practically applied to your business’s every day operations.  Just the fact that you’ve invested so much time and money into the development of it should encourage you to squeeze every bit of that money right back out of it, even beyond the investment stage.  Keep in mind that creating the right type of plan and creating it in a way that makes sense for you and your business is a major determinant in the success of your plan, and that implementation of the plan is not a once and done deal.

So What Makes a Great Business Plan?

A business plan is usually required for any new business that is looking to start up and is looking for some kind of funding, be it bank overdrafts, loans, mortgages, grant funding etc. It is also necessary when looking for larger funding to expand a business, and perhaps to acquire equity investment. There are many sources on the internet that will cover a mass of detail that should be included in a business plan, a one-size fit’s all plan if you like. As a template and source of ideas this is okay, but rule number one in producing a business plan is “tailor it not only to your audience, but to your specific business and how you will achieve the goals in the plan”.

Too many plans revolve around what the target audience wants: “What do we need to say, and how do we need to say it to get our hands on those funds?”, this can be a major mistake and may well backfire on you. Sure, you want the funds but not at any cost. Imagine you suit the plan to the reader’s needs and then fail to hit targets in 3 months time, knowing that you couldn’t have met them anyway but needed the funding, what then? Understand what the funder wants from you, and make sure that you include all of the relevant core detail they need to help make a decision. But use your business plan as two things, a tool to manage your business ongoing and to help meet those targets you are setting, and as a marketing document that sells your business idea and strengths to your audience. You may only get one chance, make it count first time, every time!

A business plan is like a story. It has a start, middle and end. It has a plot, that needs to unfold in front of the reader’s eyes, taking them on a journey that throws up a host of challenges and shows them how the characters can overcome, and succeed! There is always a happy ending in a business plan, but along the way there are real terrors and dangers which the reader needs to be convinced can be conquered, and at the end they are confident the main characters are the one’s to do it! It is not a cold and mathematical document…bring it to life, make it real. If it looks and feels real, then with hard work and the right people it can become real.

The main components of a business plan, and the key way to approach them, should be:

1. An executive summary:  This is where you set the scene and outline the ‘plot’ of your business plan, where you bring the characters to life. Explain why your product or service is so good, why it is unique or better than the next best thing. Tell the reader who the characters are, what makes them so experienced and special that they have the mental and technical skills to make the plan work. Build the confidence, build the belief. Present the figures for cash flow and profit and loss, do it graphically and include a second graph to show a ‘what if’ scenario. Let the reader know you have thought about slow sales, slow cash collection, cost increases, and that even in the worst case this is how you are going to see a return on your money!

2. Aims and objectives: Let the reader know what makes you tick, why you are wanting to do this and what you want from it, not just financial. That helps build the confidence in your drive and resilience, but also shows how much you’ve thought about things. The action points in your plan should also drive you down the route towards achieving these aims.

3. Business description: This is a bit more methodical in that you need to describe what you will be doing, but give it a warm feeling that shows your passion for what you do. Tell them what makes your business different, and how you plan to differentiate yourself. Include a small section here on regulations and licenses here if they apply, this makes sure you have factored in costs and ticked the legal boxes.

4. Managing your business: You need to let people know that you have everything in control, that you can manage every bit of your business and if you don’t have the resource then your plan explains how you will acquire it. Split it into easy sections covering finance and accounts, marketing, sales, HR, administration, health and safety etc.

5. Customers and the market: To get confidence in your plan you need to do your homework and not just about the key players in your target market. You need to show you understand them, what drives them, what their aims are and how you can satisfy them. How will you persuade them that your product is better? A thorough understanding of the competition is key too. Who are they and what are their strengths and weaknesses, and those of their products? How are you going to overtake them, can you add value to an existing product, or release something that complements it? How will you differentiate and catch the eye of the customer? Show the reader that you have tirelessly done your research, and that you have those entrepreneurial skills to better your competition.

6. Marketing plan: Include your strategy for marketing, and how you will gain access to your planned customer base with what methods. Describe your approach, who will be doing it, the timescale for enacting the plan. If you lack marketing experience look at grant-funded consultancy to bridge the gap.

7. Sales plan: How many units are you going to sell to whom? What services are being purchased from your business? Are the sales one-off or recurring, where will new customers fall into your plan, what are the prices and who is driving your sales effort? These all need to be answered, but make your business plan stand out by not making it matter of fact statements. Write it like a diary almost, tell the reader what you will do on what day or week or month, how you will do it, who will do it…it’s like a bulleted action plan of sales achievement. Include a section on courses of action if your plan slows down or customers are not won. Sensitize the sales line to prove you are also a realist, but that you have a backup plan.

8. Operations: Every plan should cover the things you will need to operate effectively. These can include staff, offices, factory units, storage buildings, capital equipment, licenses and authorisations, statutory requirements like rates and insurances, suppliers for you processes, distribution centres, vehicles etc etc. There’s generally nothing sexy about the operations side of a business but think of it as the engineroom on a ship. If it doesn’t work, the passengers are going nowhere. Explain how each area is covered in your plan, and how you and your team will use their skills and drive to make it as efficient as it can possibly be.

9. Financial forecasts: It is worth having this done professionally, or at least audited by a professional. The profit and loss is important but even more so is the cash flow forecast.  The timing of purchases and collections from debtors can seriously impact on your cash requirement. Take time to ensure you have made realistic assumptions and also to do some sensitivity on it. What if you have a major breakdown and need to find £2,000 up front, what if your debtors slow down from 30 days payment to 60 days, what if your energy bills go up by 15%? All of these examples hit your cash flow, meaning your nicely prepared cash flow forecast that said you could manage in 6 months time has been blown out of the water. Be realistic, have a plan that lets the reader see what your contingency is.

10. Business Risks & SWOT Analysis: Not every plan includes these but it is worth including them to ensure the reader sees you have covered all of the bases, and put ideas at least in place to combat any potential risks. A good SWOT analysis shows that you are a realist who understands that your business plan isn’t based on you thinking you are perfect, or that threats do not exist from day one.

So make your business plan come to life as it is being read. Make it clear and concise where appropriate, and always be thinking of a ‘what if’ situation in every part of the plan…after all, the reader will be. If you answer the question before it can be asked, that’s the best way to convincing your audience that you are serious, realistic and can adapt and overcome. Let your business plan become the blueprint that you can work to in the first 12 months of your business. Amend and update as you go, but don’t lose sight of those original aims and just how you told people you would achieve them!

Good luck with your business plan! 

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