In my 18 years of being involved with small businesses and the many years before that helping in my Father’s CPA firm or other entrepreneurial ventures, I noticed the importance of a business plan. Anyone that has listened to me on the 2 Regular Guys podcast or has been in one of my marketing seminars knows I’m a huge advocate of having a business plan. But I wanted to take that advocacy past just promoting a business plan, and give you the 5 things that I have seen to be part of a good business plan. So, let’s explore those 5 important items every business plan must include.
- 1) Self Reflection / SWOT Analysis
This is normally the first part of any good business plan, and I suggest that you actually really refine this portion before anything else in your plan. This can be the most challenging part as well as this requires a very honest assessment of your strengths and weaknesses. S.W.O.T stands for strengths, weaknesses opportunities and threats and this is going to require some research. It is one thing to jot all these things down from your perspective, but the best assessment is someone outside of your organization. Ask someone you trust that is not involved in your business to give you the “elevator pitch” for how they see your business from the outside looking in. Maybe reach out to some key customers for their opinions if you can and try to get as many open objective opinions as you can.
2) Description of Responsibilities of Key Team Members
This can be an ever-evolving part of your plan but it is imperative in getting the team all on the same page. I have seen way too many companies struggle with partnerships, employees or other stakeholders because these areas were not clearly defined. It’s worthwhile to get those key team members involved in defining their roles too. This way everyone is part of their own success and the success of the company. BONUS – You can use the descriptions for future job postings if you are thinking far enough ahead or when your company changes and grows and you need to put new people into those key roles.
3) Marketing Plan
As a marketing guy, this is always one of the most important things to me, but it also has been the first area where I skimped and that came back to bit me. A marketing plan is a great tool to help you save money, attract new customers, strengthen your relationship with current customers and get down to the brass tacks of your niche. A marketing plan is probably the most fluid part of your business plan, and if used as such will help guide you to your best possible chance of success. Make sure the marketing plan also included the things from #3 and #4.
4) Goals and Milestones
Goal setting is a very important part of any successful person’s life and the same holds true for a successful business plan. You must have a vision of the journey you plan to take and what that journey looks like. Set those milestones in there as well to give you checkmarks along the way you can check off as you travel towards your goals. When it comes to goal setting one of the best pieces of advice I have heard is to imagine your goals in pictures and vivid dreams. This was from Rory Vaden and he said to use the VAST method. V-isual | What specifically do you see when you have reached your goal? A-uditory | What do you hear in the background when you have reached your goal? S-mell | What does it smell like when you reach your goal? T-ouch | How does it feel when you reach your goal?
The financials normally round out a good business plan and those financials should include a budget and in fact, I would say several budgets. These budgets don’t just help the accountants, they actually will help you and your business stay accountable to the plan. Your business plan should have one large overall budget for your yearly expenses broken down by month. You should also have a marketing budget clearly defined so you know where and when to spend those marketing dollars to get the best bang for your buck. Then you should also have a time budget for your marketing plan so you can also know where to spend that other limited resource. You can go even further with budgets if it makes sense for your business, but the important part is to make sure your budget has a section for filling in actuals. Make sure you make it a regular task to review those actuals and include others who are involved in that process. This will be the perfect excuse to review the business plan regularly to fill in those actuals and make sure you are still on track.
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With those 5 important items complete and clearly defined, you have a much better chance at success than those though gloss over these 5 items. You also have a million times greater chance of success than those who don’t have a business plan at all. The crazy part is that we all know these things to be true but most don’t have a business plan. What other areas of your business plan are the most important to you?