While having a business plan is obviously a good idea — in fact, it’s a fundamental requirement — it must be robust, complete and accurate. Otherwise, it’s not going to steer your business in the right direction; on the contrary, it might take you over the edge or down a pitfall. What’s more, if you’re thinking about applying for a business loan from a bank or credit union, having an excellent business plan is mandatory. After all, if you aren’t sure of where you’re going, how and why, then lenders aren’t going to be filled with confidence.
With this in mind, here are 10 must-have elements of a successful business plan:
- Business Overview. This is a concise, yet complete profile of your business, such as location, corporate structure, date of formation, product/service offerings, and core value propositions (i.e. your unique success factors and the key problems you solve).
- Industry Analysis. This highlights your marketplace dynamics, such as size, shifts and trends.
- Customer Analysis. This identifies your target audience, and explains how your solutions will solve their problems and achieve their goals. Describe both psychographic and demographic factors for all buyer personas.
- Competitive Analysis. This is a list of your main competitors, and focuses on their relatively strengths and weaknesses — and especially how you will address the former and exploit the latter.
- Marketing Strategy. This looks at how your solutions will be branded and marketed to your target audience. If applicable, also focus on distribution and fulfilment issues (i.e. how customers will access your solutions).
- Risk Management Strategy. This looks at your core operational processes, and discusses how you will identify, monitor and mitigate risks. Ensure that you highlight your social media risk management strategy here as well.
- Executive Group. This is a list of all members of your management and executive team. Provide a summary of why each individual is qualified to help your business succeed (e.g. experience, education, reputation, etc.). If you haven’t recruited a full roster yet, that’s fine. In that case, list any key unfilled roles (e.g. CTO, CMO, etc.), and note when you plan to hire.
- Financial Plan. This is a list of your financial projections, along expectations and assumptions (e.g. getting a business loan, etc.).
- Appendix. This is where you can include any supplemental material, such as resumes, etc.
- Executive Summary. No, I haven’t forgotten about this critical piece of the puzzle, and the fact that I’m listing it last doesn’t mean it’s the least important. In fact, it’s among the most (if not the most) important element, since some potential inventors, lenders and partners won’t make their way through a business plan if they don’t like what they see in the executive summary. The reason it’s listed at the end is simply because it should be the last thing that you create, since it needs to be a compelling encapsulation of the entire plan. If you do the executive summary first, you may leave gaps, or there may be inconsistencies.
The Bottom Line
The wise adage “a failure to plan is a plan to fail” may not have been coined specifically with business plans in mind, but it certainly could have — because it’s critical to get this right. Use the 10 tips above to head in the right direction, and put your business on-track for sustained growth and lasting success!
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