What should be in a business plan?
What should be in a business plan?
At the time of writing this article, it is coming up to the end of the year. So it’s a great time to consider planning for the next 12 months (if you haven’t already).
Not everyone has a business plan, but in a recent survey, 87.5% of small business owners felt that having a business plan is important, although only 66.7% had a plan in place. (Source: The Business Community survey July 2021, 48 respondents).
It’s probably worth saying that a business plan does not have to be a tome. In its simplest form, it could just be a one-page document with the key objectives that you want to achieve over the next 12 months.
The important thing is that it is a “dynamic” document. By that, I mean that you should be revisiting the plan on a regular basis to check that you are on track for achieving what you want to achieve against the goals you set. If it’s working – fine. If not – what do you need to adjust or change to get back on track?
The other important elements missing in most business plans that come across my desk are tangible actions in line with the targets you have set yourself. A big failing of small business owners is they don’t take action, or if they do, it is reactive rather than responsive, putting out the day-to-day fires that present themselves.
So, what should be in a business plan? How about the following?
- Vision/mission statements
- Competitive advantage
- Target market
- The “pillars of business”
- SWOT analysis
Let’s look at each element in turn.
Say what now? Surely these are just for the bigger, corporate businesses? Well – no! In my view, creating such statements form the foundations for your business, helping you to distinguish yourself from your competitors, improving your decision making (is your choice in line with the statements?), as well as helping align any stakeholders in your business. Not convinced about vision and mission, take a look at a branding specialist, Marie-Louise O’Neill’s thoughts on the topic?
Very few businesses offer something unique that can’t be acquired elsewhere as a direct alternative or substitute for whatever your offering is. So, you are going to need something to attract potential customers to you rather than your rival. This could also be called a unique selling proposition (USP).
Unfortunately, “unique” can be misleading and contradictory to what was said earlier, and you could have more than one USP. To establish what it is or they are, consider what you are the expert in that has you shine above the rest. It may be something that your customer doesn’t offer or what they can’t or won’t offer.
One great way of helping you stand out is to offer a guarantee that your competitors don’t offer. Often this could be something you are doing already, e.g. giving people their money back if not satisfied – you’re just not telling the world.
Something else that will add to your competitive advantage is to be clear on who your target market is (sometimes referred to as an avatar, persona or just ideal customer). There are numerous ways you can break this down to identify what that looks like: turnover, number of staff, geography, position in the company, industry sector, age and so on. It will be a combination of these factors and may take some effort to identify. But once this is done, it will make your marketing a lot easier – as you will be able to better “speak” to your audience; engaging with them in a language they will understand and making it clear what the fix is that you have for their problem.
The “pillars of business”
You should dedicate a section for each of the “pillars” of business: finance, sales, marketing, operations, resources and personal. These topics cover all aspects of any business.
Under each heading, you need to look at your business and focus on the following:
- Where are you now?
- Where do you want to get to?
- How are you going to get there?
- What are the “now” actions?
- What are the “next” actions?
By undertaking this exercise, you will start to identify your goals and targets, then in turn start to establish what you need to do to successfully reach them.
Finally, it is worth undertaking a SWOT analysis. Developed in the 1960s, this is still a valid tool today and, for me, is a “catch-all” process. Looking at the strengths, weaknesses, opportunities and threats within your business teases out anything that might not have fallen out while compiling the previous sections of your business plan.
If putting a business plan together seems daunting, then reach out for help. There are business advisors and coaches out there, but there is also software that can support you as well as online tools. (The Prince’s Trust offers some guidance and templates for free). You will also find various enterprise agencies in your region that will be able to assist you in putting your plan together (this is usually a free of charge service).
Whatever your (potential) business plan looks like, make sure that you are reviewing it regularly, amending accordingly and most importantly, taking action to progress your business in the direction you want it to go.
Paul Green is the founder of The Business Community. He has been an independent business owner since 2003 and loves working with small businesses; in particular family-run businesses. His experience and knowledge of over 25 years and having worked with 100s of business owners, gives you the confidence in his ability to offer business advice, coaching and training. Having experienced the trials and tribulations that face a small business on that entrepreneurial journey, he is passionate about making sure businesses don’t make the same mistakes that he made en route! He is a big believer in collaboration and encourages businesses to work together to grow their businesses; as well as offering help and support to each other for mutual gain.