Joe Johnson, Ph.D.
Entrepreneur. Investor. Startup Expert.
In a very real sense, your business plan is your company boiled down into a single document. It has to speak to your values and objectives, project your financial expectations, and describe how you intend to do business. When someone reads your business plan, you want to proactively answer any questions they might have about the viability of your business or goals.
Your business plan can aid in formulating your goals and future milestones, as well as with laying out an operational framework. It’s a great tool for determining whether your business idea is viable and can serve to highlight areas of concern enabling you to resolve issues preemptively. Your business plan doesn’t have to be set in stone, after all. It’s a living document that will benefit from iterative changes.
For those who are interested in creating a business model canvas to highlight your company’s goals, I’ll be covering that process in a separate article.
These tips will help to maximize your business plan’s effectiveness:
What’s the Pitch?
Before digging in deep and starting on your executive summary or sales projections, take an hour to outline your business in a one-page pitch.
While this pitch is intended to serve as a rough sketch to help you focus before going further in-depth on your business plan, it can also help toward getting your elevator pitch down pat. To make this process even easier, I’ve linked to a free PDF you can download at the end of this post. At a minimum, you should cover the following components:
What Do You Do?
Clearly define your company’s purpose in one sentence. Do you provide digital marketing services to legal providers? Do you support insurance agents by taking care of their business operating needs? Are you an eco-friendly dog groomer launching your first location? Your sentence should convey both what you do and what makes your business unique.
What’s the Problem?
Generally, a business endeavor identifies and fulfills a need. What need have you identified? Are lawyers frequently behind on the digital marketing scene? Are insurance agents bogged down with paperwork and not left with sufficient time to make sales? Are too many dog grooming supplies full of toxic chemicals?
What’s Your Solution?
Now that you’ve identified the problem, how will your business provide an innovative solution? Perhaps you’ll create a digital niche to help lawyers increase their client bases or aid insurance agents to get back in the field by handling their routine paperwork and customer service calls. Maybe your eco-friendly dog grooming salon will provide non-toxic products along with treats and other pet supplies.
Who’s Your Target Market?
Who are you aiming to serve? Be specific about who you think will benefit from your services. Is it lawyers whose websites are out of date and therefore missing the digital revolution? Insurance agents who are missing sales goals because of red tape? Environmentally conscious dog owners who want the best for their pups? The more specific you can be, the better.
Who’s the Competition?
Businesses don’t operate in a vacuum. Who else is doing similar work in your area? Chances are, there’s at least one other business doing something similar. Indeed, given the realities of the online economy, you need to consider potential competition from much farther afield – possibly even worldwide.
What Are Your Sales Channels?
How do you plan to approach potential clients? Will you have a sales team or rely on a website or storefront? What form will your sales process take?
How Will You Spread the Word?
What kind of marketing activities are you planning? Will you have PR, a digital marketing firm, or a pay-per-click advertising campaign? Do you plan on papering local dog parks with flyers or delivering proposals directly to local law firms? Consider how you’ll spread the word about your business.
How Will You Make Money?
What products or services will you offer to generate income? Will your revenue come in the form of retainers for digital marketing or business services? Will you charge per grooming appointment or provide memberships? Don’t worry about specific numbers at this point, just identify the particular activities and services.
What Are Your Primary Expenses?
Starting a business generally requires some sort of investment, whether of time or money. What expenses will you incur to get your business running? Consider the costs of domain registration, website creation, licensing, rent, salaries, etc.
What Are Your Goals?
What do you plan on achieving over the next few months or years? What milestones must you reach to create a successful business? Consider when your website should be completed, when your supplies must be available, and when you plan to begin advertising, etc.
Who’s on Your Team?
Do you have any partners on your team? Do you need to make any hiring decisions? Consider the roles you’ve already filled (plus those remaining to be filled) and list them here.
What Are Your Resources?
Are you certified in digital marketing or have years of insurance work under your belt? Have you invented a revolutionary dog wash that’s been popular with friends and neighbors? List any of your resources here, from special skills and important partnerships to products.
Once you’ve completed your one-page pitch, it’s time to evaluate. Does your business make sense? Can your idea generate revenue? Can any changes be identified and made at this point to increase your chances of success? If you were a customer, what questions might you have? What if you were an investor? Challenge your pitch to find any weak spots. Take notes as you go.
Make any necessary revisions to strengthen your one-page pitch. Once you feel as though you have a thorough understanding of your business, it’s time hunker down with the primary document: your business plan.
About the Author
Dr. Joe Johnson is an entrepreneur, investor, and startup expert. He is the founder and principal of GoodField Investments and the GoodField Foundation (www.GoodField.com).
Joe has a Ph.D. in Entrepreneurial Leadership and an MBA. He is the author of the upcoming book on The Science of Why Most Entrepreneurs Fail and Some Succeed.
Most importantly, he is the incredibly blessed husband of one amazing wife and father of six wonderful children. He resides in Bradenton, Florida. For more information on Dr. Johnson and his work, go to www.JoeJohnson.com.