Regardless of whether you’re looking to start, grow or sell a business in 2018, don’t use a business plan template. Your plan should reflect your unique focus.
The best business plans, according to Hal Shelton, a SCORE mentor, angel investor and author of “The Secrets to Writing a Successful Business Plan,” aren’t generic.
“There are hundreds of templates, and they are usually one-size-fits-all,” Shelton said. “But every business is unique.”
Add Value
Think of a business plan as a road map for how you’re going to successfully accomplish your specific business goals, he said.
The starting point is a clear value proposition: “What problem are you solving that someone is going to pay for?” he said. “That’s really what’s going to differentiate you and your business.”
Other key elements of a strategic business plan include an executive summary that entices prospective investors to read more. If you’re a startup, it’s important also to include a one-to-two-page bio about yourself. “Because the company has no track record, [an investment] is really a bet on the individual,” Shelton said.
The bio you write, however, should be very different from a LinkedIn profile, he advised. “You need to say why you are the right person at this time to run this business,” Shelton said. That means, unlike touting your education, as a LinkedIn profile does, education need not be high on the list of mentions. Instead, include a financial section that describes why the business is going to be successful, he added.
Know Your Market
One of the most critical elements of a strategic business plan is a marketing and sales section that clearly demonstrates your understanding of the market and describes a strategy for success. According to Shelton, this section should describe:
- Ideal customers, their demographics and characteristics — and where they get information about new ideas and products. “The No. 1 issue that all small businesses have is, ‘How am I going to get paying customers?’” he said.
- Competitors’ strengths and weaknesses. “If you are the new company on the block, why should people buy from you?” he asked.
- What are the 10 things you will do to reach customers and, ultimately, get them to buy your product?
Plan For Growth
Figuring out how to grow begins with a review of your past year, including both successes and mistakes, Shelton said. When assessing financials, look beyond the numbers. Consider the assumptions underlying the decisions that led to the last year’s results, he added.
And ask questions, Shelton said, such as: What did we do that worked? What didn’t work? How is the market changing, and what do we have to do differently?
Make sure that you have the resources to fuel growth, whether that’s cash, people or buying certain assets, he advised.
Companies should stay on top of the latest technology trends when making a strategic business plan, Shelton said. When evaluating technology trends, consider your position in the market and whether you need to adopt technology to get a jump on the competition or to just stay competitive. It’s equally important to understand if you will be penalized for not adopting the technology, he added.
A strategic plan also must include long-term goals, Shelton said. “Long term” may be just three years into the future. Short-term goals typically address the year ahead, he noted. These should be implemented in a flexible way so the business can pivot and change as needed.
Don’t Procrastinate
If you’re having a hard time getting started, you’re not alone. “For someone who is new to the industry, having that blank page can be daunting,” said Shelton, who suggests starting with a preliminary feasibility plan that is no more than five pages long.
Start small, describing in just a couple of sentences your business, value proposition, ideal customers and how you plan to attract them. Do the same for your market strategy, sales forecasts and cash flow forecasts. If the feasibility exercise looks good, use it as a draft to create a full business plan, he said. Build it out with research.
When writing any business plan, know who will read it, Shelton added. If you are also writing for a second audience — a banker, investor, potential customer or vendor — consider what’s important to them and present the information in a format that’s easy to visualize. But always write first for yourself.
Lastly, “Don’t try to do it alone,” said Shelton, who noted that help is readily available. For example, SCORE provides free mentors and has about 300 chapters nationwide, as well as many online resources including webinars, workshops and blogs.
“It’s really hard for one person to know it all,” Shelton said. “Surround yourself with people who can help.”
