"What is it that you do again?" You are asked that question all the time, and you should have your concise, yet informative answer ready at all times. That answer is called your “elevator pitch”, and we’ve addressed how to formulate one for your business elsewhere on this blog. But in order to truly understand where you want your business to go, and also to evaluate where your business has been, you need a written business plan. Moreover, your business plan tells your financial stakeholders (bank or credit union, family and/or friends, clients and customers) how you plan to make a profit with your business.
A well-thought-out and well-written business plan contains the mission, the vision, and the goals and objectives for your business. It is your roadmap and navigation tool for your business. It is important that you review and revise your business plan on a regular basis; at a minimum, every calendar quarter. Are you staying within your budget? What was going on in your business last month, last quarter, last year? Where do you want your business to be next month, next quarter, next year? Are you reaching your goals? What is working and what needs to be adjusted?
Of course, to find the answers to all of those questions in your business plan, you have to actually take the time to write one. Yes, it does take time, but it is a necessary and worthwhile use of your time. Unless your business requires outside financing, as a freelancer or solo practitioner, you can write a comprehensive business plan in just a few pages. For very detailed business plans as required by potential lenders, it would be best to have your business plan professionally prepared. Otherwise, at the very minimum, your business plan should contain the following information and data:
- Your business idea in one short paragraph.
- Your mission statement.
- Your vision statement.
- Your ideal client/customer.
- The challenges faced by your ideal client/customer and how the benefits offered by the products or services of your business can help solve those issues.
- The brand and image of your business.
- Your expected revenue, expenses, and profit/loss projections for the next 1, 3, or 5 years. Your business accounting software application will help you to generate the reports you need for this section.
- Your major competitors, and how you are different from/better than they are.
- A marketing plan for the next four quarters.
The most important part of your business plan is that you actually have one, so block out a few hours in your schedule, find a quiet place, and start writing! Your business will thank you!