Creating a Viable Business Plan in 8 Steps
Entrepreneurship is a risky endeavor — but it can also be a profitable one. While many small business owners have a strong vision of what their business should be, few will take the time to create a viable business plan with the proper brand positioning.
According to the Bureau of Labor Statistics, roughly 20 percent of new businesses will fail within the first year, and that number jumps to 50 percent by the fifth year. Whether you need to impress investors or want a roadmap for your own peace of mind, a business plan is a crucial task for any successful startup. Here's how to make one:
1. Do Your Research
Before you start your plan — and throughout the process, as well — you'll need to perform tons of research. You should research your industry, your competitors, possible marketing strategies, current financial statements, and anything else you can find. Regardless of what type of business you are forming, when it comes to establishing the plan, there is no such thing as "too much" research.
2. Define Your Company
The first page of your plan is called an "executive summary," and it should include all the critical information about your business. This should be an overview of your corporate structure, your core services, your brand platform, your team leaders, your target audience, your OKR’s (objectives and key results), and any other relevant information.
3. Position Your Brand
This is one of the most crucial steps in developing your business plan, but is often the step that is overlooked, or undervalued. Defining the core tenants of your brand platform, such as your mission, vision, and values will shape the company and culture that you desire for your brand. You must also clearly define the primary reason your company exists, how your company differentiates from others, and why people should care about your company. If you are unsure on how to build a full brand platform, feel free to reach out to an agency or a consultant that specializes in brand positioning.
4. Explain Your Marketing Strategy
All good business plans include market analysis and marketing strategy. You should begin clarifying your marketing strategy by adding the research you compiled about your competitors and their strengths and weaknesses. You should also answer the big question, “How will I find customers?” During the process of developing your marketing strategy, you should consider the specific tactics that you will use to build your network and reach prospective customers. Some of these tactics include: publishing regularly on social media and engaging your audience, using paid advertising to drive web traffic and brand awareness, attending networking events, offering to provide trials or promotions, and blog writing (such as this) on relevant topics.
5. Prepare Your Org Chart
Your business plan should include an organizational chart of the important members of your team, or the vendors you will use (aka “Org Chart”) to perform key tasks such as legal, consulting, financial, technology, marketing, and sales. This team that surrounds your business should include specific duties that will contribute to the company's overall success. Your plan should also clarify the primary Standard Operating Procedures, (e.g. SOPs) on your key processes, and details about your company's legal structure (LLC, partnership, S-Corp, etc.).
6. Include Financial Projections
Financial projections are arguably the most essential part of any business plan, but it is also the most unforeseen until you begin running your business. Financial projections, preferably based on an actual sales history, are especially important if you need outside funding. Your forecasts should be detailed and realistic, and they should extend for at least five years into the future. If you aren't comfortable doing the legwork yourself, you can hire an accountant within your org chart to help you prepare financial forecasts.
7. Assemble "Other" Documents
If your investors or business partners request any other documents, you can include those in an appendix to your business plan. Common documents include credit reports, bank statements, permits, insurance policies, or other documents that help support your business plan.
8. Have an Exit
Beginning with the end in mind, which is one of the 7 Habits of Highly Successful People, can not only help you put the company on the right path and help you visualize the long-term succession plan, but it can also prepare you for the best and worst-case scenarios along the way. Whether it is very soon or long ahead, there will be a time when you are no longer running the business. So, what does that day look like? What are the milestones leading up to it? What is the ideal scenario when that happens? As you finish formulating your viable business plan, ask a few of these questions to help you determine your exit strategy.
A viable business plan is a labor-intensive process, but it's essential. While many business owners try to proceed without a detailed plan, it's better to take the extra steps to help ensure your business's success down the road. If you need a little more help getting started, you can also view this basic planning template and make a copy for yourself.
Regardless of what business stage you are, we can help you grow your brand by improving the way you think and communicate.
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