Business Plan Best Practices
A powerful business plan lays out your course for years to come. Find out what you need to consider when crafting yours.
What
separates a weak business plan from a good plan? Or a good plan from a
great one? As with any reliable roadmap, a powerful business plan
clearly lays out a course and provides alternatives to follow should any
roadblocks appear.
A business plan is
an important tool for internal planning in your small business and for
garnering support from external sources. Use the business plan best
practices here to create a solid plan for your business.
Build the plan
around its audience
A business plan can be used for many purposes and should be created with
its use and audience in mind. You might create a plan as a tactical
rollout guide for a new product or market, as an annual strategic
guide,
as a tool to lure investors, or as a way to get your organization
excited about the coming year. The way you'll use the plan should shape
its focus. A plan aimed at raising money needs to focus on the talent
and experience of your team to boost investors' confidence in your
company. It should also be slickly produced, printed and packaged. A
strategic guide for internal use, on the other hand, might focus more
closely on the steps required to roll out a new product. Multiple
versions of your plan may be required if you have more than one audience
and purpose.
Focus on finances
A strong business plan demonstrates that there is a financial impact
related to all strategies, ideas, and assumptions. In one way or
another, every section of your plan needs a financial
bent--How will
marketing generate income? How will the competitive
environment impact
your ability to make money? What will production of a product cost and
how will that impact profitability?
Be realistic in
your enthusiasm
While it is natural for a business plan to reflect a belief that your
offering or approach is superior to anything else on the market,
remember to temper your zeal. In creating each section of the plan, ask
yourself what a skeptic would be concerned about regarding your
statements and assumptions. For example, if your plan concerns a new
product introduction, ask yourself about the barriers to acceptance.
Always return to the "why"--Why would customers switch
allegiance to you? Why would companies outsource a service to you, etc.
? You can put a plan to the test by sharing a rough draft with someone
you know who has a skeptical nature.
Segment whenever
possible
No business can be all things to all people. Focusing on specific market
segments will improve the accuracy of your planning, since you will be
able to build your financial assumptions around the specific needs of
those segments. Don't limit segmentation just to your marketing
efforts--the habits and values of your target audience will likely
influence everything from product development to pricing.
Produce carefully
Whether you are sharing a business plan with staff only or a
discriminating outside resource, features such as charts that clearly
illustrate a point, statistics that back up an assertion, or
judiciously-placed graphics can increase the likelihood that your
audience will be receptive to your message. Once your plan is complete,
have it proofread by two different people to ensure that mistakes don't
undermine its effectiveness. Also, consider the appropriate way to
package a plan. A plan for bankers, partners or investors should be
printed on high quality paper and bound. You can cut some corners with
an internal document, but be sure your document reflects the effort you
put into it.
Revise, revise,
revise
A business plan is a "living" document that requires periodic
review and continual improvement. Your plan may be your company's
roadmap, but your business can quickly be thrown off course by market
downturns, shifting buying habits, or even better-than-anticipated
sales. Review your plan regularly to see if you're on track and adjust
budgets and priorities accordingly.