On the Road to Success: Create a Business Plan
You wouldn’t start out on a long road trip without mapping out your route first. The same goes for your new business. If you want to embark on the road to success, you need to create a business plan – a detailed account of where you want to go and how you’re going to get there.
Why Take the Trouble?
Your business plan serves a number of functions. As you put together your plan, you are developing clear goals in your own mind that will help you to stay on track. Whenever you have a decision to make, you can go back to your plan and ensure that the direction you are taking meets the goals and objectives you have established for your business. The process is valuable – it is not so much the end result of a written plan that is helpful, but the research you do, decisions you make, and goals that you set while creating the actual business plan. Doing your homework and dedicating some time to your business plan is not time wasted, but rather time spent wisely.
Your business plan is also a sales document. It shows others that your business can and will succeed. A well-written business plan gives you credibility with lenders, investors, employees and clients. It also allows you to develop financial forecasts and compare planned and actual performance down the road.
Starting Your Business Plan
Your business is unique and your business plan should be too. Don’t worry too much about the page count. It might be two pages or 30, depending on the complexity of your business, the audience and whether or not you are applying for financing. Business plans vary in content and length to meet the particular needs of each company. It’s more important to provide useful illustrations, readable bullet points and charts than to squeeze text on the pages.
The Executive Summary
The executive summary may be the most important section of your plan, particularly if you are pitching your ideas to investors or banks. It’s often the section that readers go to first. It outlines key points, including highlights from each of the other sections. It explains your product or service, target audience, legal structure, objectives and funding requirements. It should be no more than two pages, but it has to be interesting enough to pull readers in. It’s the first section of your plan, but write it last, once you have clearly established objectives. Write with enthusiasm. Use simple terms and explain your product or service as if your reader has no previous understanding of it.
The Body of Your Plan
While you will want to create a business plan with your own personal stamp on it, there are a number of typical areas that you should cover. Here are some categories to include:
1) Business Description
Provide details about your company’s history, purpose and plans for growth. Include a study of your industry, competitors and the advantages your product or service provides. You might wish to include mission and vision statements to give readers (and yourself) a clear picture of what your business means to you.
2) Marketing Strategies
Provide a look at how you plan to market your business. Outline who your customers are, how your product or service meets their needs, how much you plan to charge, your delivery methods and your promotion strategies. Note how much is in the budget for marketing costs. Make sure you identify your unique selling proposition and answer the question “why would customers buy my product or service?”.
3) Operational Plan
Include a look at day-to-day operations – your hours of operation, seasonal availability, facility requirements, management information systems and IT requirements.
4) Human Resources
Who works for you? What are your short-term and long-term plans for recruiting employees and training them? Provide brief job descriptions and an organizational chart.
5) Financial Forecasts
It’s time for some numbers. Provide financial forecasts for the next few years, including thorough details for the upcoming year.
Consider adding sections for e-business and social responsibility strategies if those areas are important to your business.
Sample Business Plans and Templates
Don’t start from scratch. Look to others for support and advice. The Government of Canada has online resources to help you create a business plan. TD Canada Trust has a business planner that you can complete online. BMO also offers online resources. Or, take a look at RBC Royal Bank’s business plan samples. BDC offers a detailed business template in Word and Excel. Remember to leverage resources such as friends, family, mentors and employees as well as business support services in your area.