A well-comprised business plan is essential for the success of a business, regardless whether you intend on using it to obtain funding or for business management purposes.
The business plan is pretty much the roadmap of the business and the main tool that will help you determine what resources you require and what steps you need to take to obtain a profit.
Writing a business plan will put you in the position of analyzing your company from an objective point of view. In addition, the process will help you find new opportunities and offer new strategies you haven’t previously considered. The actual plan will become a benchmark which you can use in any and all stages of the business development process to ensure you are on the right path or that you need to make some strategic changes.
These 10 tips will help you go through the stages of writing a business plan that will be realistic and useful in guiding the decisional process.
1. Business vision, mission and values. Always, when launching a company most entrepreneurs are tempted to jump head first to daily actions and operational details: to evaluate and to create the product, to look for clients and to aggressively promote their product/service. But this type of attitude can bring more harm than benefits in the long run.
Before losing your head in details, create a clear vision and a set of values for your business. Determine the mission of the company, and using it, define your objectives and priorities. In this stage you need to clarify why your business exists, what you hope to accomplish, and what you actually stand for.
Once you have a clear picture you are able to jump to the next planning stage.
2. The budget isn’t the same thing as the business plan. As a matter of fact, this means that you can’t create a solid and correct business plan without having some accurate financial forecasts and at the same time, the budget must reflect all of the other elements of the plan.
If you don’t have a solid knowledge of the industry your company is a player in, of your clients, your competitors and the specific market conditions (profit margins, deadlines, supplier fees, etc.) it’s a good possibility that the numbers comprising your budget are not in accordance with the market reality.
3. Don’t ignore your clients. One of the risks of entrepreneurship is that sometimes the entrepreneur thinks that he knows best what his or her clients need and want, sometimes even better than the customer itself.
To eliminate these types of risks, make sure you do everything in your power to familiarize both with your market and clients, find out the needs and wishes of the customers and build your plan focusing on all these aspects.
4. Never underestimate your competitors. Trust is extremely important in the business world, but arrogance is dangerous. If you start from the premise that your company is the only one in the market that matters and you ignore your competitors, you are opening yourself to useless risks.
Your competitors need to be evaluated and analyzed: it is important to know what their strengths and weaknesses are, what strategies they’re adopting and what type of people are they hiring. Moreover, competition is a valuable inspiration source for your own strategies.
5. Always be prepared to take some risks. If you’ve started writing a business plan, this doesn’t mean that you’ll eliminate all risks, but rather that you will understand and have contingency back-up management plans set in motion. Therefore, the role of a business plan is to anticipate the challenges that may appear down the road and offer alternative scenarios for each situation. Moreover, the plan must include strategies not only for combating the threats, but also for taking advantage of opportunities.
In the business world, just like in everyday life there is a major difference between taking some calculated risks and hazardously jumping head first. This is where the business plan comes in by helping you make this distinction.
6. Ask for a second (even third) opinion. Even the most experienced entrepreneurs know they can benefit by having different points of view from different people outside of their business. One way to do this is ask someone outside your business to read the business plan and expresses his or her point of view regarding the business idea, the objectives, the strengths and weaknesses or certain aspects, etc. They can also offer ideas on other elements that should be included in the business plan that will make it more legible or easier to understand by third parties.
7. Show flexibility! Each business plan must leave maneuvering space for unforeseen situations. This means that marketing plans and budgets must be flexible or that sometimes you will have to give up on some practices that have proved successfully in the past but are no longer in accordance with the new market realities. The business plan is a tool meant to guide you not limit you, so approach it with an open mind.
8. Don’t lose sight of the elements that make you unique! This is one of the most important elements of a business, allowing you the chance to differentiate yourself from your competitors. Therefore, even if it’s wise to take a closer look at the activities of your competitors, don’t start to copy their strategies. See what are their strengths and weaknesses and find ways to exploit their weaknesses and constantly improve your business.
Don’t forget you’ve become a part of the business world to leave a mark so dare to do things your way!
9. Establish a clear system of rewards. Creating a company involves a lot of work and sacrifices. That is why it should include a series of benefits not only for yourself but also for your employees. Don’t forget that people are more motivated when they understand for what they work, so make sure your employees know the objectives of the company and the reward system. Moreover, respect your promises.
10. Write down your business plan! Regardless of how much time you invest in planning your business, the best chance to succeed is when everything is comprised in a well-written plan you can constantly read, use and improve. Therefore, just thinking about it won’t cut it. Rather, you need to write it and put it into practice!