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Tim berry on business planning, starting and growing your business, and having a life in the meantime., 8 factors that make a good business plan.
This is the first of four answers to interesting questions. Yesterday I got an email from an MBA student asking me four questions. It’s part of his research. I balked at first, because I think I’ve answered these questions before, on this blog, or on my other blogs, or at www.bplans.com , or planasyougo.com . Then I realized that answering these questions is blogworthy. So here is the first of four:
What makes a good business plan?
Here’s the hard part, right at the beginning: the value of a business plan is measured in money. That’s hard for me at least, maybe not for you, but for me. As a genuine ex-hippy baby boomer entrepreneur, I like touchy-feely do-gooder measurement systems. But that’s not the real case. Like just about everything else in business, the value is money. Money in the bank.
The actual calculation is pretty hypothetical. You take the money in the bank with the business plan and subtract money in the bank without the business plan, and that’s the value. One of the two is just a guess. But there it is, a cold hard (although hypothetical) number.
With that in mind, here are some of the qualities of a good business plan, in order of importance:
1. It fits the business need
We simply can’t look at business plans as generic. You have to start with whether or not the plan achieved its business purpose. Some plans exist to get investment. Some are supposed to support loan applications. Those are specialty uses, that apply to some business situations, while almost all businesses ought to develop management-oriented business plans that exist to help run the company, not to be presented to outsiders.
Obviously form follows function. The business plan used internally to manage the company doesn’t have to polish and present the company to outsiders, so it probably lives on a network, not on paper. But the plan as part of high-end startup looking for VC or angel investment does in fact have to present the business to outsiders. These are very different plans. Some of them have sales objectives, selling an idea, and a team, and a market, to investors. Some have a support objective, reassuring a lender about risk, usually with assets. My favorite business plans are about managing: starting and growing a company. A plan that might be great at selling the company might be bad at supporting a loan application, or for managing a company.
So point one, what makes a good business plan, is that it fits the business need. Does it achieve the business objective?
At this point it’s hard to avoid going into branches. I’m going to resist the temptation to write about what people look for in investment-related plans, and then the plan for lenders, or the operational plan. There are a lot of branches on that tree. Factors like readability and ease of navigation and covering all the main points depend a lot on whether those qualities affect achieving the plan’s business objective.
So it’s entirely possible to have an excellent business plan that’s never been printed, that isn’t edited, that contains only cryptic bullet points that only the internal management team understands.
And it’s also possible to have a well written, thoroughly researched, and beautifully presented business plan that’s useless.
2. It’s realistic. It can be implemented.
The second measure of good or bad in a business plan is realism. You don’t get points for ideas that can’t be implemented. For example, a brilliantly written, beautifully formatted, and excellently researched business plan for a product that can’t be built is not a good business plan. The plan that requires millions of dollars of investment but doesn’t have a management team that can get that investment is not a good plan. A plan that ignores a fatal flaw is not a good plan.
3. It’s specific. You can track results against plan.
Every business plan ought to include tasks, deadlines, dates, forecasts, budgets, and metrics. It’s measurable.
Ask yourself, as you evaluate a business plan: how will we know later if we followed the plan? How will we track actual results and compare them against the plan? How will we know if we are on plan or not?
While blue-sky strategy is great (or might be, maybe), good planning depends more on what, when, who, and how much.
4. It clearly defines responsibilities for implementation
You have to be able to identify a single person will be responsible for every significant task and function. A task that doesn’t have an owner isn’t likely to be implemented. You can go through a business plan and look to see whether or not you can recognize a specific person responsible for implementation at every point.
5. It clearly identifies assumptions
This is very important because business plans are always wrong. They’re done by humans, who are guessing the future, and humans guess wrong. So business plans must clearly show assumptions up front because changed assumptions ought to lead to revised plans. You identify assumptions and keep them visible during the following planning process.
6. It’s communicated to the people who have to run it
At this point we leave the discussion of the plan itself, as if it were a stand-alone entity, and get into how the plan is managed. The first five points here are about the plan. You can deal with them as the plan develops. This and the following two are about the management of the plan.
I know that’s kind of tough, because it means that a plan that isn’t managed isn’t a good plan. But I can live with that.
So a good plan is communicated. Up above, where I suggest that the qualities of writing and editing are not essential for all plans, and I reference cryptic bullet points that only the team understands: I stick with that here. If only the team understands them it, it can still be a good plan; but it has to be communicated to that team.
We’re judging the plan by the business improvements it causes; in some sense, by the implementation it causes. So people in charge have to know and understand the plan. Plans in drawers, or locked on a single computer, only work when it’s a one-person organization and nobody else has to know the plan.
7. It gets people committed
Here too it’s about the process surrounding the plan, more than the plan itself. The plan has to have the specifics in point 3 and responsibilities as in point 4, but the management has to take them to the team and get the team committed.
For the one-person business that’s easier, but still important.
Definition of commitment: in a bacon and egg breakfast, the chicken is involved, and the pig is committed.
8. It’s kept alive by follow up and planning process
Sadly, you can have all seven of the above points, and if you drop the ball — the plan in the drawer syndrome — then the plan still isn’t a good plan. It has to bring the planning process with it, meaning regular review and course correction.
No business plan is good if it’s static and inflexible. Planning isn’t about predicting the future once a year and then following that predicted future no matter what. Planning is steering and management. It takes a process of regular review and course correction.
I found this article very informative as the planning is first and one of the best steps to consider in businesses.
It was interesting to learn about how a managed plan is a good plan and it can be communicated with the team and develop the plan. I can imagine that a business could benefit from having a plan for their business and know if it is feasible to grow a business around this time. It could be really useful for a business to make sure that they will be able to grow while keeping track of the right data.
Thanks Oleg, nice post, short and right on point. Thanks for quoting me. Tim
Thanks for reading the post and sharing your comments.
When I was 20 years old I started my own business. I didn’t really saw the purpose to make one until later I suffered. Thanks for the article it will help other adventurous individuals.
Mgonzo I’m sorry if you don’t have easy web access, that makes life difficult; but there is so much free information available on the web about good business planning that nobody I know would have the time to sift through it all and send you that in email. I recommend you go immediately to bplans.com, the site you were on when you posted this comment, and click around to see the thousands of pages of information on business plans, including 550+ complete sample plans, including all the numbers in the appendices, available there. Also, my last book on business planning is available, complete, with all graphics, at http://planasyougo.com . And my previous book on business planning is available, complete, with all graphics, at http://hurdlebook.com
[…] most important thing to acquire if you are going to take this path includes money. Where is the money going to come from? Also if you are going to work as a team then begin […]
It’s really a matter of how real the plan is. There are lots of business plans that end up in trash-cans because the targets are not doable and bring dispersal instead of focus. I agree with Tim especially on the point that targets do have to be communicated to people who are responsible for them… Why would I spend my time on writing something that is not going to work?
thanks for the article tim berry it realy helped me in my assingment .Continue doing the good works GOD BLESS YOU
Hi Tim – I really enjoyed reading your piece. We write a business plan every year and it ends up stuffed in a drawer – the only time we bring it out again is to revise it the following year. Do you think it is the constant review process that helps to make it more relevant to the day to day management of the business?
Hi Tim – I have a silly question in regards to #7. I love to rationalize phrases and I don’t quite get the definition of commitment. “in a bacon and egg breakfast, the chicken is involved, and the pig is committed” Why isn’t the chicken committed? If not, there’s no egg. No?
Carol: the pig is dead. The chicken will lay another egg tomorrow.
[…] Berry is a business plan expert. We took a look at one of his posts from his website outlining a number of steps that can be taken to ensure that your business plan is a strong one! […]
[…] and energy is required. Business plan expert, Tim Berry understands this. And as such, he writes on his website about the various ways that business owners can create successful business […]
SELF MOTIVATION IS ANOTHER KEY PRINCIPLE TO A SUCCESS OF BUSINESS
Thanks Joseph. I think that’s true, but this post is about factors that make a good business plan. Would you say that a good plan increases self motivation? Should the self motivation be part of the plan?
i think in life as a person you need to plan what ever you want to do cos a life witout planning is incomplete. what do you think guys!!!
Excellent information. I really agree with your approach. It’s very ‘organic’ as it takes the nature of what really happens into account while still relying on numbers and tracking to manage the plan’s DNA. Planing is the perceived assumption but it must change as it gets implemented to fit the real world.
[…] high-level guidelines on what business plan should look like, read Tim Berry’s post entitled: 8 Factors that Make a Good Business Plan. If you are interested in understanding the art of managing change, read Tim Berry’s book The […]
Henri, I recommend a monthly plan vs. actual review once a month, which would result in revisions and corrections as needed (watching whether assumptions have changed); and an annual refresh on strategy and markets and such; plus additional revisions when major changes occur. Tim
How often should you review your business plan
1. Why is it that a Break-Even plan for the business was not mentioned at least explicitly? 2. Also, there should something that compares the plan with actual progress made. For instance, if it’s a Bus plan writing then it should compare number of actual plans prepared(N1) say in a quarter and the number(N2) in the business plan. It should say “Hey!!!! It is off by 15 (N2-N1=15)in this quarter.Lost $30000!! Take care great men and women!!” Thanks
Asoke, re your specific points:
- Because a break-even plan isn’t as important as the points I do mention.
- I appreciate your thought there with that one, because of course I agree, but I’m confused with why you thought it should be added. Don’t you think plan vs. actual is included with point 3, “It’s specific. You can track results against plan,” and then point 8 “It has to bring the planning process with it, meaning regular review and course correction?”
@Jess: “more simply”
@Jess: re simpler, I appreciate the comment What would you like to be more specific, so maybe I can help? I’m always in favor of simple. Is there a specific point, or maybe more than one, you’d like me to try to rephrase? Tim.
this needs to be put a bit more simpler
Informative and logical article . Thanks for writing and publishing . I think business plans is just for effective utilization of enterprise’s investment in effective scheme of business
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What should a business plan include?
1. the executive summary, 2. a description of the business, 3. the market(s) the business will operate in, 4. a swot analysis.
5. Management team and personnel
6. The products or services offered
8. A financial plan
The contents of a business plan
This is placed as number one on our list of components of a business plan , but it can easily be the final stage. That's because sometimes it's easiest to write your summary after you've covered all the other details.
A great summary is one of the key features of a business plan. It serves as an overview of your entire business and the elements surrounding it.
Be sure to outline succinctly the 5 "W"s (Who, What, Why, When, Where) as well as the mission statement . Think about why you started the business along with where you would like it to be in the future, how will you get there? Your mission statement is the start of creating a culture that people in your organisation will live and work by.
This section should contain details of things such as your goals and the customers you will service. What are the products and services you will offer to your customers? You'll need to provide an overview of them and how they will address customers' needs and wants?
You've come up with this great business idea , but how will it do in the market? Or, more importantly, what is the market for it? How well do you know the market? What does a typical buyer look like, what is their income level? Does the business have the hallmarks of disruptive innovation ?
This is the time to research and determine who your target market is and ask specific questions that relate to your product or service. Put you idea to the test. What have others done before you and what can you do differently and better? Analyse what information you've uncovered and outline it's potential impact in your plan.
Create a detailed list of your strengths, weaknesses, opportunities and threats. This needs to be done with an open and honest approach, keep emotions out of it, focus on being objective when analysing your business and those of your competitors.
Any strengths you uncover will represent internal, positive factors in your business that are within your control. Weaknesses are also internal, but are negative factors that need to be improved.
Both opportunities and threats are external factors. While opportunities will potentially positively impact on your business, threats represent negative factors beyond your control. For example, are there high barriers to entering the market? Does a competitor have the market cornered due to brand loyal customers? These could harm your enterprise, so you need to strategise for it in your plan.
5. The management team and personnel
Who will run the business, who are the directors in the business? What are the skills of the management team and how do their different responsibilities make maximum use of their abilities. What is the chain of command in terms of decision making?
Also use this section to identify how the management team, and taking on employees will help maximise strengths, while addressing identified weaknesses to help improve the business.
Finally, which of the UK's business structures will you choose to operate through?
- Limited company
- Limited liability partnership
In this section you need to detail what will be produced and how it will be sold. You should explain how your product or service will meet a particular need in the marketplace, and how you'll get customers returning to make repeat purchases. Repeat custom is after all the lifeblood of many a good business.
Who will you rely on, in terms of suppliers, to help you assemble your products? What intellectual property, patents or copyright do you own, or might you be at risk of potentially infringing?
What is the branding to your business? What are the key messages you want to communicate with your target market and how will you go about reaching them? How will you achieve market share and at what cost in terms of your budget?
8. Let's talk money: A financial plan
Ideas are great, but how will you make them a reality and sustain a viable business. Creating a financial plan will give you the opportunity to address your financial concerns and talk money, think about start-up costs, financial projections , funding and investor pitches.
You'll need to list how much your start-up will cost, everything from stationary to leases should be outlined and balanced against your financial projections.
Don't fear change, your business plan isn't written in stone
It’s important to remember that your business plan isn’t written in stone. This is a document that you and your staff can improve and update as the business grows and changes. Your plan should be reviewed regularly.
Consider implementing a monthly review to track progress or make adjustments to your strategy. Accountability and motivation are key in making sure your goals are met, think about the people involved and what can you do to keep them inspired.
This post was created on 26/06/2018 and updated on 18/02/2022.
Please be aware that information provided by this blog is subject to regular legal and regulatory change. We recommend that you do not take any information held within our website or guides (eBooks) as a definitive guide to the law on the relevant matter being discussed. We suggest your course of action should be to seek legal or professional advice where necessary rather than relying on the content supplied by the author(s) of this blog.
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Summary. The five key success factors — strategic focus, people, operations, marketing, and finance — help businesses determine their strategy for long-term success. Critical success factors, on the other hand, are the steps a company needs to complete to reach a goal.
As an organization that caters to its consumers, comprehending the needs and values of a business’s target demographic is crucial to forming a logical strategy.
Identifying and understanding the five key success factors of business is the best way to establish a foundation of knowledge about a company and its customers.
The five key success factors of business are:
Companies need to implement all five key success factors in order to be successful in the long term.
Critical success factors are accomplishments businesses must have in order to meet their goals.
5 Key Success Factors of Business
What is a critical success factor, how to determine your business’s critical success factors, examples of critical success factors, factors of success in business faq.
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The key success factors are a series of five overarching aspects that ultimately determine a business’s long-term success.
The five larger groups contain ten smaller conditions, which need to be satisfied for the business to (hypothetically) thrive. In each of the world’s most profitable companies, the five success factors join together to establish a cohesive unit that’s lucrative for the long term.
The 5 Key Success Factors of business is a theory of strategic business management posed by Buck Lawrimore. The concept was derived after the analysis of over 100 popular books and 20 years.
Below is a definition for each factor:
Strategic focus. The strategic focus aspect of success means that the company’s goals, brand, and actions all move towards a targeted goal. The companies that manage to last in competitive markets are the ones whose leaders define their values and a realistic mission.
This factor is about sticking to the ultimate business objective and ensuring that every project is an effort toward this. A significant part of the strategic focus is making sure that the target chosen is constructed from the customer’s wants and needs .
Strategic Focus Key Success Factor Examples: Establishing and sharing core values that align with customers Leaders of the business are devoted to upholding the business’s core values The overall company mission is pursued through realistic goal-setting
People. The second ingredient for business success is the personnel that makes up the corporation. A company’s staff is what expands its development, which means it’s crucial to hire a team that’s qualified, dependable, and passionate about performing well.
This success factor also refers to how satisfied a business’s employees are with working there.
Just as much as employees need to strengthen the business, the business needs to provide its team with adequate opportunities for success as well. Satisfaction with working for your business builds productivity and increases employee retention rates .
People Key Success Factor Examples: Hiring the most qualified applicants based on their skills and experience The company’s employees fully understanding their job responsibilities Employees are given the chance to provide meaningful input on business decisions
Operations. The daily and long-term functioning of a company is defined as its operations. The specific operations that a business handles differ depending on the industry it exists in.
For example, the operations of a company that produces jeans likely involve sourcing materials, product creation, and generating sales. The business operations of a pediatrician ’s office would be very different.
For operations to be successful, the functions need to be recorded and have a measurable efficiency to determine if the processes need tweaking over time.
Operations Key Success Factor Examples: Processes focused on providing excellent service to the customer All operation efforts being documents and trackable over time Procedures being continually evaluated to ensure effectiveness
Marketing. Marketing acts as the branch between a company and its customers. There are many facets to good marketing, such as targeting the right audience, forming a recognizable brand, and evaluating consumer satisfaction post-purchase.
Marketing attracts new customers to your brand through media communication, supporting business growth. Without its customers, a business is quick to fall flat on its face.
Marketing Key Success Factor Examples: Defining a target marketing audience for the business Expanding the customer base through media communication and advertisements Eagerly receiving customer feedback and using it to improve
Finances. The final factor of success is often the first one that people’s mind jumps to when they consider the term, finances.
A company’s finances refer to the entirety of its assets, which include things like sums of money, properties, and materials.
In addition to maintaining the company’s financial data, it also includes their product’s financial characteristics. Pricing has a considerable impact on how customers perceive the product and how well it sells.
Finances Key Success Factor Examples: The products are appropriately priced for a profit to be made while still attracting and maintaining customers Keeping track of finances for a better understanding of company health Every employee of the company understands how their actions affect profits and finances
Critical success factors are a business management framework similar to the Five Factors, but it’s composed of the elements necessary to complete a project. It’s a checklist of qualities that enable a professional goal to be accomplished.
Unlike the Five Factors model, critical success factors do not outline the success of businesses. Rather:
They describe what needs to be done to achieve and provide a reliable system of measuring success.
A company’s critical success factors vary greatly depending on the circumstances of their industry, competitors, and what their goals are.
A business that sells alarm systems to homeowners might look at sales and the percentage of customers who left positive reviews to quantify their success.
Alternatively, a social media manager would consider their critical success factors to be the number of new customers generated monthly and website traffic.
Gather a group to manage critical success factors. Before beginning work towards establishing a business’s critical success factors, gather a team to handle the matter.
Delegating tasks ensures that nothing gets overlooked. The main participants in this group should be senior employees since they are the most experienced in the business and on the team.
Request feedback from employees . A company’s employees are its eyes and ears. As such, they usually have extremely valuable insight into what a business needs to do to succeed in long-term goals.
Develop business goals. Before evaluating the conditions needed to accomplish an objective, the business first must set its goals.
Consider what is needed to achieve these goals. This is the part where critical success factors come into play. Now that a list of achievable short and long-term goals has been set, think about what steps need to be taken to achieve them.
The elements required to reach a goal describe the company’s critical success factors when it comes to that particular project.
For example, a restaurant whose long-term goal is to improve its profits by 6% might take on the critical success factors of improving customer satisfaction and the quality of its food.
Put the plan into action. The beauty of critical success factors is that they map out a strategic plan for completing a professional goal . With an inventory of the most essential success factors settled, the only thing left to do is explain and execute the strategic plan.
To quantify the effectiveness of critical success factors over time, establish a measurement system. With a goal involving an aspect, like sales, measuring success is straightforward, but that’s not the case for every critical success factor.
Observe and evaluate as needed. A strategy based on critical success factors has been put into motion, but that doesn’t mean the job is done.
Strengthening employee satisfaction . Employees are the backbone of the company they represent. This means that boosting employee satisfaction is often a relevant critical success factor in improving other aspects like productiveness, regardless of industry.
Improving sales and profit. Since many businesses survive off of maintaining sales and profits, it makes sense that it’s a popular critical success factor. Improving these finances is implemented as a critical success factor when the long-term goal involves needing increased funding. For example, a dog groomer who wants to expand their business by buying a second location might address the success factor of improving sales to buy the new property.
Brand awareness. Customers need to know that a business exists for it to survive among its competition. A lot of companies feel this pressure and choose to focus on brand awareness as a critical success factor. Building up a name for a brand helps solidify standing in the market and assists in working towards a variety of long-term goals.
What are the five key success factors for a successful business?
The five key success factors for a successful business are:
What are success factors in business?
Success factors in business are the elements required for a business to be successful in the long term. Success factors can also be the steps a company needs to complete in order to meet a goal — these are usually called critical success factors.
University of Missouri System – Success Factors and Other Competency Models
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Sky Ariella is a professional freelance writer, originally from New York. She has been featured on websites and online magazines covering topics in career, travel, and lifestyle. She received her BA in psychology from Hunter College.
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Developing a Business Plan: 3 Major Factors
In order to develop a successful business plan, one must focus on the three major factors which contribute towards the success of a business. The essential idea of developing a business plan is so that you are able to identify the strengths and weaknesses of your business, and work towards success from the get-go.
1. Business Plan
The first and foremost important factor is the actual business plan. Business owners need to develop a method through which they can transfer their vision and thoughts into reality. This includes where they want to see their business in the near future, how do they want to achieve that benchmark, how will the business benefit and grow while achieving it? In order to answer these questions in the most digestible way, the best tool to use is a business plan.
A successful, well-crafted, and neatly presented business plan is bound to capture the eyes of many potential investors as well as customers too. If we were to define a business plan in simple words, we would say that it is the foundation or any business, company, or organization’s success. Developing a business plan should cover four essential areas including:
- Business Ideas
- Market Analysis
- Market Strategy
- Financial Analysis
2. Business Idea(s)
The section is to sell the primary vision of the business while outlining (briefly) how the business will accomplish that vision. This can be further expanded into a plan if there were three important key elements used within the idea, they include:
- Business Summary – Brief description of the business
- Keys to Success – Short statements to describe the values promised by the business for its customers
- Staff and Management Summary – Statements to draw attention from the people who will be responsible for the success of the business.
3. Business Markets
Before any risks are taken, it is very important for the owner of the business to learn about the current market conditions and predict future market conditions while they are developing a business plan. This is very important as the market experiences constant changes and starting a new business at the wrong time will have a negative impact, which may last longer than what the owner expected.
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10 Qualities of a Good Business Plan Explained
9 min. read
Updated October 27, 2023
According to the United States Small Business Administration, there are approximately 32.5 million small businesses at the moment. The number fluctuates from year to year with businesses coming and going. If you want to remain profitable and thrive, you must have a plan to move forward.
A business plan does far more than help secure venture capital when you’re starting out. You’ll use a strong business plan throughout the life of a company. Use it to refocus your goals, refresh your memory on growth plans, and fulfill marketing goals. Share your plan with employees, shareholders, and investors, and refer back to it to see if you need to make adjustments along the way.
Having a solid business plan can help you successfully start, manage, and grow your business. But what are the qualities that make a business plan more than a document? What does it take to write a strong business plan?
- What are the characteristics of a great business plan?
An excellent plan works for your company and keeps everyone on the same page. There isn’t a lot of ambiguity in it, and all things are listed in an orderly fashion that’s easy to absorb.
The format of the business plan may be almost as important as the words within it, so use bullet points, headers, bold print, and other tricks to keep the reader engaged.
Whether you already have a business plan written and want to edit it to perfection or you need to start from scratch , there are six characteristics every strong plan has.
1. Clear language
It might be tempting to throw in a bunch of industry jargon to show your knowledge of your niche. Unfortunately, most lenders won’t know what you mean. It’s much better to stick to language anyone can understand. You never know who you’ll need to share your business plan with.
Read over the plan several times for typos and clarity. Read out loud so you can “hear” the words. You’ll catch awkward phrasing by speaking the words. You can never have too many eyes on the plan. One person might catch a particular spelling error while another sees the grammatical errors.
Get feedback from your employees, family, mentor, and friends. You don’t have to follow every suggestion, but you should consider what everyone says and choose the things that make the most sense for your business model.
Look at the business plan through the eyes of someone outside the industry. Does everything make sense? Are there any phrases someone might have to stop and look up? You don’t want the reader to be thrown out of the flow of the text.
2. Employee recognition
Your business plan should include a layout for employee recognition. Developing a strong workplace culture benefits your brand in numerous ways, such as creating staff loyalty and retaining your best people. It’s difficult for a company to thrive and grow without focusing on its workers.
When employees receive recognition for their accomplishments, they are 82% happier in their jobs . They’ll outperform workers in a company without the plan for an excellent culture. If you aren’t quite sure what your company culture should be yet, just make some notes on the things you’ve loved about your favorite places to work.
3. Realistic goals
While you might love to run a multi-billion-dollar conglomerate, most small businesses stay relatively small. That isn’t to say you can’t find great success as a small business owner, but make sure your goals are achievable .
What’s your biggest business challenge right now?
As you work through the potential revenue numbers, pay attention to what others in your industry make in a year. You might be able to exceed that by 10%, but thinking you’ll make four times what your nearest competitor does may not be very realistic.
Making your goals too lofty may hurt your chances of securing financing, too. Those considering investing in your business may feel you don’t fully understand the typical earnings of your industry.
4. Great mission statement
The best business plans outline the purpose of your company. Why did you start the business in the first place, and how will you leave your mark with the brand?
For example, a small landscaping company called Massey Services shares its mission statement on its website. Their overall goal is total customer satisfaction . Everything else in their statement on their webpage ties into that philosophy. They also want to build long-term relationships, they want people to trust them, and they value truth and integrity.
When you have a strong mission statement , it drives everything else you do. If your focus is on building relationships, you’ll develop a company culture based on interactions with employees. Your mission statement might arguably be the thing about your company that never changes.
5. Methodology for results
Make sure your business plan has a way to track results over time. Lay out the methodology of any facts and figures used to estimate revenue or what your costs will be. Then, check against those assumptions from time to time to make sure you’re hitting the right beats.
For example, if you plan to hit a certain level of revenue by the end of the first year, how can you break that down into quarters, months, and weeks? What is the best way to make sure you achieve your goals?
You can’t fix mistakes or make adjustments if you don’t know where you are in the journey. Pay attention to how quickly the brand moves toward objectives and make adjustments as needed.
6. Foundation for marketing strategies
How do you plan to get the word out about your brand? You must have a marketing strategy that makes sense for your budget and your philosophies as a brand. Perhaps you plan to work exclusively with online influencers. How much will you allocate to the budget for influencer marketing?
Take time to study who your target audience is and create buyer personas representing the average person who’ll buy from you. While you might need to tweak your personas from time to time, a solid plan, in the beginning, gets things off on the right foot and helps you bring in new customers.
Figure out how much you’ll spend online and offline on marketing efforts. Where can you reach your average customer? Do they mainly hang out on Facebook? If so, much of your budget can go to Facebook ads. On the other hand, if they use TikTok and rarely visit Facebook, you might want to put more time, energy, and finances into building an audience on the newer platform.
7. It fits the need of your business
The best business plan for your company takes into account why you need a business plan in the first place. Are you going for funding, using the information to improve internal operations, pitching your concept to investors, or perhaps communicating your goals to employees?
There are many different reasons you’ll utilize a business plan. They aren’t one-size-fits-all . You may even find you need addendums or additional plans to match the needs of your business at any given time.
If you intend to use your plan in-house to motivate employees or stick to your goals, a one-page plan may be all you need. You can also use a shorter version to test ideas you have and see how they might match the goals of your company.
On the other hand, a traditional full-length plan works best if you need funding from a bank or want to pitch a concept to an outside investor. You can also use a longer plan to get feedback from a mentor or business coach.
8. Your strategy is realistic
In a recent Gartner Execution Gap Survey, approximately 40% of leaders said their enterprise accountability and leadership were not aligned on an execution strategy. If your business plan doesn’t lay out how the business operates, there may be too much room for interpretation that causes dissent within the company and makes people work against one another instead of as a cohesive unit.
Start by ensuring different operational milestones within your plan are attainable. For example, if you share a financial forecast, is it realistic? Based on current revenue, can you realistically achieve your goals? If you’ve brought in $200,000 per year in revenue for the last few years, don’t expect to jump to $400,000 in the next quarter. Make a plan for increasing revenue – but in increments that make sense and are achievable.
You don’t need an unrealistic plan. Company leaders and employees will only grow frustrated and discouraged if they’re unable to hit any target goals laid out in the plan.
9. Clearly identifies assumptions
When you’re writing out a business plan, you may not have all the answers. At best, some of the information is an assumption based on outside data, past performance, and any testing you’ve completed. There will be times when you make a mistake in your estimates.
Be upfront about what your assumptions are when writing out your plan. Did you assume the company will increase 10% in productivity this year because it did in the last few years? Share your thoughts on why you think this is achievable based on past factors, but also make it clear it’s a guess. In reality, the company may over-or-underperform on those expectations.
Show what is an assumption also point to what might need to be updated or refined after a few months. Consider these areas to revisit frequently for updates or to set new goals.
10. Easy to communicate with the right people
Who is your audience? Knowing who will look at your business plans allows you to create it in a format you can share with the right people. Consider factors such as how easily scannable the text is and what it looks like in different formats, such as a document or PDF file.
Who are you sharing it with, and how will they use it? For example, if you include any links, will the person be able to click on them and go directly to the page you want them to go to? Is the viewer likely to read the plan on a mobile device? How well does the format adapt?
Consider who you’re sharing it with and how they’ll need to use it to make sure you offer it in the best format for viewing by that individual. You may even want to save your business plan in a variety of different formats.
- Keep your plan updated
Your business plan isn’t something you write once and then forget. To truly make yours work for your business model, you must refer back to it and see where you are with your predictions and goals. As you hit high notes, add new objectives and plan them out with measurable goals.
Over time, your business plan won’t look much like the one you used the day you opened your company’s doors. However, the mission statement will likely stay the same, and elements such as company culture won’t change much.
What will change is your knowledge of the industry and how well you can adapt to the challenges faced by all small business owners. With a plan for handling different situations, you’re certain to be one of the small businesses finding success past the 10-year mark.
See why 1.2 million entrepreneurs have written their business plans with LivePlan
Eleanor Hecks is editor-in-chief at Designerly Magazine . She was the creative director at a prominent digital marketing agency prior to becoming a full-time freelance designer. Eleanor lives in Philadelphia with her husband and pup, Bear.
Table of Contents
10 Min. Read
How to Set and Use Milestones in Your Business Plan
4 Min. Read
How to Develop a Positioning Statement for Your Business
9 Min. Read
How to Write a Customer Analysis
8 Min. Read
How to Format a Business Plan in 8 Simple Steps
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The Top Elements of a Successful Business Plan
1. the business plan, 2. the strategy, 3. the goals, 4. the plan of action, 5. the financials, 6. the people, 8. closing the gap, 9. appendix.
The business plan is the most important document a startup will create. It is the road map for the company, and it will be used to raise money, attract partners, and drive growth. The business plan must be well-written, clear, and concise.
There are several key elements that should be included in a business plan :
1. The Executive Summary: This is a one-page overview of the company that includes the company's mission, vision, values, and goals. It should also include a brief description of the products or services offered, the target market, and the competitive landscape.
2. The Company Description: This section should provide more detail about the company, including the history, management team, and location.
3. The Products and Services: This section should describe the products or services offered in detail. It should also include information on the target market , pricing, and competitive landscape.
4. The Marketing Plan: This section should describe the company's marketing strategy, including the channels that will be used to reach the target market , the messaging, and the budget.
5. The Sales Plan: This section should describe the sales strategy, including the sales process, quotas, and commissions.
6. The Financial Plan: This section should include financial projections for the next three to five years. It should also include information on the company's funding requirements.
7. The Exit Strategy: This section should describe the exit strategy for investors , including a timeline and milestones.
A well-crafted business plan will give a startup the best chance for success . The plan should be reviewed and updated regularly as the business grows and changes.
The Business Plan - The Top Elements of a Successful Business Plan
The strategy section of your business plan should outline your plans for achieving your business goals. It should be clear and concise, and should include specific steps that you will take to reach your targets. Some key elements to include in your strategy are:
Your target market: Who are your potential customers? How will you reach them?
Your competitive advantage: What makes your business unique? What will give you an edge over your competitors?
Your sales and marketing strategy: How will you generate leads and convert them into customers ?
Your business model: How will you make money? What are your key revenue streams?
Your milestones: What are some key milestones that you need to reach in order to achieve your goals? When do you hope to achieve them?
Your financial projections: What are your expected revenues and expenses? When do you expect to become profitable?
This is just a brief overview of what should be included in your business plan's strategy section. For more detailed advice, check out our full guide to writing a business plan .
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In order to be successful, every business must have a clear and concise goal. Without a goal, businesses cannot measure their progress and determine if they are on track to achieve their objectives. The goal of a business plan should be specific, measurable, attainable, realistic, and time-bound.
The goals section of a business plan should be clear, concise, and specific. By outlining specific, measurable, attainable, realistic, and time-bound goals, businesses can set themselves up for success.
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In any business, a clear plan of action is essential for success. This is especially true when starting a new business, as there are so many moving parts and things to consider. A well-crafted plan of action will help to keep you focused and on track, and will ensure that your business has the best chance of succeeding.
There are a few key elements that should be included in any plan of action. First, you need to have a clear idea of what your goals are. What are you trying to achieve with your business? What are your long-term and short-term goals ? Once you have a good understanding of your goals, you can start to develop a plan to achieve them.
Next, you need to identify your target market . Who are your potential customers? What needs do they have that your business can address? What are their buying habits and preferences? Once you know who your target market is, you can start to develop marketing and sales strategies to reach them.
Finally, you need to have a financial plan in place. How much money do you need to start your business ? How will you generate revenue? What are your expenses? Having a solid financial plan is essential for any business, but it's especially important when starting a new business .
If you keep these key elements in mind, you'll be well on your way to developing a successful plan of action for your new business.
A successful business plan must include detailed financial information. This information will include your start-up costs, operating expenses, income projections, and how you plan to use your financial resources. Your financial information must be well researched and accurate.
Start-up Costs: Include a detailed list of all the costs associated with starting your business . These costs can include legal fees, permits, licenses, equipment, inventory, and leasehold improvements. Be sure to include all one-time costs as well as recurring costs.
Operating Expenses: Include a detailed list of all the costs associated with operating your business on a day-to-day basis. These costs can include rent, utilities, salaries, insurance, and marketing. Be sure to include all fixed and variable costs .
Income Projections: Include detailed income projections for your business. These projections should be based on realistic assumptions and should cover at least the first year of operations. Be sure to include all sources of revenue, such as product sales, services, and grants.
Financial Resources: Include a detailed list of all the financial resources you will use to fund your business. These resources can include personal savings, loans, and investments. Be sure to include the amount of each resource and the terms of repayment.
The financial section of your business plan is one of the most important sections. This section will provide potential investors with the information they need to make an informed decision about investing in your business. Be sure to include all the required information and present it in a clear and concise manner.
In any business, the people are the most important element. Without the right team in place, it will be very difficult to succeed. The team should be composed of individuals with the necessary skills and experience to help the business achieve its goals. In addition, the team should be cohesive and work well together.
One of the most important aspects of putting together a successful team is to make sure that everyone is on the same page. Everyone should have a clear understanding of the business's goals and objectives. In addition, each team member should know his or her role within the company. It is also important to have a good communication system in place so that everyone is able to stay up-to-date on what is going on.
Another important element of a successful team is trust. Each team member must be able to trust each other. This can be difficult to achieve, but it is essential for a successful team. If there is not trust among team members, it will be very difficult to get anything done.
Finally, a successful team must be able to work together harmoniously. This means that each team member must be willing to compromise when necessary. If everyone is always trying to get their own way, it will be very difficult to get anything accomplished. However, if team members are able to work together and compromise when necessary, it will be much easier to get things done and achieve success.
The results section of a business plan is where you lay out your company's goals and how you plan to achieve them. This is one of the most important sections of your business plan, as it will show investors and lenders whether or not your business is viable and how much return they can expect on their investment.
To write a strong results section, you will need to have a clear understanding of your company's financials, as well as your target market and competitors. This information will help you set realistic goals and create a roadmap for achieving them.
Your results section should include:
-A sales forecast: This is a projection of how much revenue your company will generate over a certain period of time. Your sales forecast should be based on historical data , if available, as well as market trends and your own assumptions about the future.
-An expense budget: This will detail all of the costs associated with running your business, including rent, salaries, inventory, and marketing.
-Profit and loss statements: These financial statements will show your expected profits and losses over time. They should be based on your sales forecast and expense budget.
- cash flow statements : These statements will show how much cash your business is expected to generate and how it will be used. They are important for showing investors that your business will be able to meet its financial obligations.
-Balance sheets: These statements will show your company's assets, liabilities, and equity at a specific point in time. They are important for understanding your company's financial health .
Once you have set your goals, you can start to create a plan for achieving them. This plan should include specific strategies and tactics that you will use to reach your target market and sell your products or services . Your plan should also include a timeline for implementation and a budget for each activity.
When writing your results section, it is important to be realistic about what you can achieve. Investors and lenders will not take your business seriously if you set unrealistic goals or do not have a solid plan for achieving them. However, you also don't want to be too conservative in your projections, as this could make it difficult to raise capital or get loans.
If you are not sure how to write a strong results section, there are many resources available to help you, including books, templates, and software programs. Additionally, you can hire a professional business plan writer or consultant to assist you.
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When it comes to business planning, the old adage "the devil is in the details" certainly applies. A well-crafted business plan should lay out a clear path from where your business is today to where you want it to be in the future. But all too often, business plans fall short in one key area: the all-important "closing the gap" section.
In this section, you need to clearly articulate how you plan to close the gap between where your business is today and where you want it to be in the future. This can be a daunting task, but if you take it one step at a time, it can be manageable. Here are a few tips to help you get started:
1. Define your goals.
The first step is to clearly define your goals. What exactly do you want to achieve? Be as specific as possible. Trying to accomplish too many things will only make it more difficult to focus your efforts and make progress.
2. Do your research.
Before you can start closing the gap, you need to understand where the gap exists. This requires doing some research on your industry, your competition, and your target market. This will give you a better understanding of what you need to do to reach your goals.
3. Create a plan of action.
Once you know where the gap exists, you need to develop a plan of action for closing it. This plan should be specific, realistic, and achievable. It should also be aligned with your overall business strategy.
4. Set milestones.
To keep track of your progress and ensure you are on track to reach your goals, set milestones along the way. These milestones should be specific and measurable so you can track your progress and make adjustments as needed.
5. Make it happen.
The final step is to put your plan into action and start closing the gap. This will require commitment and dedication from you and your team. But if you stay focused and committed, you can achieve your goals and take your business to the next level.
Closing the Gap - The Top Elements of a Successful Business Plan
A business plan is a formal document that outlines the goals and objectives of a business. It is also a roadmap for how the business will achieve those goals. The appendix of a business plan is where you will find all of the supporting documents for the information in the main body of the plan. This can include financial statements, market research, contracts, and more.
The appendix is an important part of the business plan because it provides supporting evidence for the information in the main body of the plan. Without this evidence, the information in the main body of the plan would be much less credible. The appendix can also be used to provide more detailed information on certain topics that are only briefly mentioned in the main body of the plan.
When creating an appendix for your business plan, make sure to include all of the relevant supporting documents. Organize the appendix so that it is easy to find the information you are looking for. Label each section clearly and include a table of contents so that readers can quickly find the information they need.
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