At present, there are about 32.5 million small businesses in the United States, according to the Small Business Administration. Their numbers fluctuate for a variety of reasons. Maintaining profitability and thriving requires a plan of action.
The purpose of a business plan extends far beyond securing venture capital. Throughout the life of your business, a strong business plan will prove invaluable. Refocus your goals, recollect your marketing plans, and recap your growth. Refer back to your plan along the way to see if any adjustments need to be made. Share it with employees, shareholders, and investors.
What Makes a Good Business Plan?
It's important to come up with a plan for your business that works for everyone. Everything is arranged in an orderly manner that is easy to comprehend. There is not a lot of ambiguity in it, and all points are explained clearly.
Keep the reader's attention using bullet points, headers, bold font, and other tricks in the format of the business plan.
1. Simple language
To demonstrate your expertise, it might be tempting to throw in a bunch of industry jargon. However, most lenders aren't familiar with these terms. Instead, speak in terms that everyone understands. Your business plan might be required at some point.
Ask your family, friends, and employees for feedback. Put yourself in the shoes of someone outside your industry. It is important not to throw the reader off-balance.
2. Recognition of Employees
Recognizing employees should be part of your business plan. Recognizing employees' achievements makes them 82% happier at work. An excellent culture will make them outperform workers in a company without it. You can begin by making notes about what you love about your favorite places to work if you aren't quite sure what your company culture will be.
3. Set Realistic Goals
Pay attention to what others in your field make each year as you work through the potential revenue numbers. The odds of making four times as much as your nearest competitor aren't very good, but you might be able to exceed that by 10%.
Having too lofty goals can also hurt your chances of obtaining financing. Investors may think that you are not fully aware of what your industry earns.
4. Strong Mission Statement
Your business plans should clearly define your company's purpose. How will you leave your mark on the business? Why did you start it in the first place?
Everything you do is driven by your mission statement. When you build relationships with employees, you will create a company culture. One thing about your business that never changes might be your mission statement.
5. Results-oriented Methodology
Make sure you can track your results over time in your business plan. Explain how you are estimating revenue or what your costs will be. From time to time, check your assumptions to see if you're hitting the correct beats.
6. Establishing a Marketing Strategy
How will you promote your brand? A marketing strategy should reflect your brand philosophies and budget. Consider working exclusively with online influencers.
Calculate your marketing budget online and offline. How will you reach your typical customer? Are they mostly on Facebook? In that case, you can spend a lot on Facebook ads. Meanwhile, if they prefer TikTok and rarely check Facebook, you are likely to be more successful in building an audience with that platform.
7. Your Business Needs it
For your business plan to be effective, you must consider why you need one in the first place. Do you plan to seek funding, use the information to improve internal operations, pitch your concept to investors, or tell employees about your goals?
8. Your Plan is Realistic
A recent Gartner Execution Gap Survey found that 40% of business leaders are not aligned with their enterprise's execution strategy. There may be too much room for interpretation if your business plan doesn't establish how the company operates, causing dissent within the company and causing people to work against one another instead of as a team.
It's not necessary to have an unrealistic plan. It will only lead to frustration and discouragement if employees and leaders fail to achieve any target goals outlined in the plan.
9. Defines Assumptions Clearly
You may not have all the answers to your business plan when you write it. Some of the information you provide is based on outside data, past performance, and whatever testing you have done. Estimates can be wrong from time to time.
When writing your plan, be honest about your assumptions. Based on the company's performance in the last few years, do you assume that it will increase productivity by 10% this year? Describe why you think this is possible based on past factors while making it clear it's just a guess. Company performance may over-or underperform expectations.
10. Communications with the Right People are Easy
What is your audience? Business plans should be formatted in a way that allows them to be shared with the right people. You should consider such factors as how easily the text can be scanned and how it appears in different formats, such as a document or PDF file.