RichardStep: Grow Yourself & Your Career
May 1, 2013 By Richard
Top 5 Characteristics of a Successful Business Plan
“No, no, no. It’s cross the I’s and dot the T’s… duh!”
Before you can get around to investing your money, hiring a staff or making a product, you need a business plan. Without a business plan it is difficult to achieve consistent, long-term success. The business plan is an outline of how the product will be created and marketed, how funds will be raised and who will buy the product.
The more detailed your business plan the better. It should look at all aspects of the business and plan for every step. One of the most important parts of the business plan is the executive summary. The executive summary is a short narrative summarizing the value of your business idea.
It helps investors or financial institutions to quickly understand the business you propose to start. It is important it be written in a way to get investors excited about the business and want to read your business plan.
The 5 Key Elements
There are 5 key elements that must be included in an effective business plan.
- Clear description of product or service
- Market & competition information
- Your unique selling proposition (USP)
- Technology and strategies required
- Listing of feedback obtained throughout your process
It should provide a clear description of the product or service and contain an in-depth look at the market you plan to enter and your primary competitors. This should also show what makes your product or service unique and will make customers choose you and not your competitors.
Any technology to be employed should also be clearly described along with the resources you will need for production and marketing. The fifth element of the business plan is a listing of some of the feedback your executive summary has generated.
The business plan itself should contain an in-depth description and analysis of the market you propose to serve. It should include as much demographic information as possible. This will help you to better understand what your company needs to do to attract and serve them and properly position your company in the marketplace.
Part of your plan has to be ways in which you anticipate your company will grow. It should include how you think your competition will react to your entrance into the market and how you will counteract it. The business plan should also include information on any intellectual property you have in the works.
Pricing is very important
Fat stacks and all that – keep the money in mind and maybe in hand.
In order to come up with a price that ensure you a good profit you have to know what it will cost to create the product. You must also show why you think your product is economically viable. Do an assessment of your company and identify any competitive advantages you may have.
Show if you are a company which will create a series of products and services or your focus is one major product which you feel will make you a success. It is also crucial for you to assess the size or the market and how much of it you can capture and control. List any trends or technologies which could negatively affect your company’s development and growth.
List the required resources to make your vision a reality, too ( like I did here ). This should include the members of your proposed management team and any other key hires you plan to make along with all technology or equipment you will use. You should also state the amount of capital you will need and a financial plan to show how you will use it. Point out your potential revenue streams.
You also have to include a profit and loss statement, a balance sheet and a cash flow plan that covers the first 12 months, 12 quarters and one for each of the first three years. It should show when you anticipate beginning to make a profit. You must also identify your sources of funding so don’t close out that file before you have this covered.
Get Your Plan in Order
The 5 main characteristics of a business plan you need to consider are to include clear information about your product or service, the market and competition, why you’re special, what technology you are to use, and what feedback you’ve received and used through your growing phases. Sure, there’s going to be a lot more to a winning business plan that brings in round after round of funding, but make sure you cover these basics first. You can work on tweaking it for ultimate success later.
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Tips to write your business plan
- Before writing your plan
- Qualities of a great plan
- Craft a compelling message
- Why business plans fail
- Common planning mistakes
- How to format your plan
- Tools and resources
- Ways to use your plan
- Business planning myths
- Write your plan in one day
- Write a business plan month
- Questions to ask a plan writer
2. Understand what makes a great plan
10 Qualities of a Good Business Plan Explained
9 min. read
Updated March 8, 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?
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What are the characteristics of a great business plan?
Keep your plan updated.
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 .
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.
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.
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.
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