Creating a business plan is an essential task for every leader who wants to operate a successful company. While it takes time and effort, having such a strategic roadmap will enable you to view your business from a higher plane and to quickly evaluate its strengths and inefficiencies.
There are 6 tips for a successful business plan. With these awesome tips, you will gain an immediate advantage over your competition.
1. Vision
A good vision statement makes the connection between your business’s passion and its purpose. Your vision statement should inspire, motivate and excite your employees, clients and the community where you do business. It should be short, concise and easy to remember.
Remember, a vision is not merely a large goal. It differs from a goal, in that you almost never quite achieve your vision-it is a virtually unattainable ideal that motivates your employees to meet and exceed your company’s practical objectives.
In other words, goals are used to measure systems and processes, while vision is the fuel that ignites people to go beyond goals to excellence. A company’s top leadership has the responsibility to drive its vision.
2. Values
Values are a clearly defined set of standards that describes your organization’s approach to relationships. It is a written code of conduct defining how all stakeholders will treat people internally and externally, including other workers, clients, vendors and the community.
Without defined rules of conduct, people have little or no direction as to what constitutes acceptable behavior in your business.
3. Mission
A short, concise declaration of the four essentials of every business:
1) What you do, 2) How you do it, 3) Whom you do it for, 4) Where you do it.
Your company’s mission statement is truly the roadmap for your employees; it is also a management tool to communicate how your company will operate in the community.
Today, they are used to guide the company’s overall direction, as well as its daily business activities. Beyond providing essential guidance to your employees, it empowers them to make swift, effective decisions by establishing critical boundaries.
Without a clear mission, a company will often become paralyzed whenever it encounters a new situation as it attempts to figure out what to do.
4. Growth
A great plan for growing your business clearly defines these four elements:
1) Your target market;
2) How to market your product to the target;
3) An advertising strategy;
4) A brand creation that establishes a unique visual and emotional identity.
A growth plan is the lifeblood of your organization. It includes your company’s sales process, marketing, advertising and branding systems.
1) Sales-the entire process that defines the demographics of your future clients (your target market), as well as the foundational activities that drive new relationships and will lead to future opportunities, sales, customers, and referrals.
2) Marketing-the activities in your company that create visibility, credibility and demonstrated ability in the marketplace. Low cost/high impact is a critical element of this process, which communicates to your market who your company is, what it does, where it does it and how it does it.
Marketing supports sales, but must not be confused with sales. Remember, marketing is about visibility, credibility and demonstrated ability. These elements build trust and branding in the marketplace.
3) Advertising-Systems in place that brings potential clients through your doors, make the phone ring and create leads. Advertising is all about making sales. It is the promotional aspect of growth and concerns about how your company attracts its customers. It also tracks where and how your customers discovered your company.
Ultimately, advertising is all about return on investment (ROI).
4) Branding involves the processes that create a product or name recognition in the marketplace. It comprises the visual and emotional impact people connect with your name, logo, and taglines.
5. Operations
Operations are how a company satisfies customer needs, wants and expectations-the blueprint that defines how a company produces its products or delivers its services. The focus here is on the components of your company’s processes or way of doing things: systems, quality control, material management and Internet technology.
1) What your systems/processes are. These define how your company executes, produces and provides its products and services.
2) How your company will control the quality of its products and services.
3) Material management or the cost of goods sold. How your company physically manages and stores its raw material before and after products are produced. It also focuses on keeping material, shipping, and storage costs to a minimum. The goal here is to minimize inventory without running short on needed materials.
4) Internet technology-how your company will use the Internet to advertise and sell your products. The focus here is how your company effectively uses its website to promote and sell its products and services. Most companies today are moving into the e-commerce where prospects can purchase items over the internet.
6. Finances
The financial aspect of your business involves how you manage the budget planning, cash flows, capital and debt servicing, KPI’s or Key Performance Indicators-like pipeline and sales values, total revenue, gross margins, operating expenses and net profit to name a few.
In the end, KPI’s serve as the monetary numbers that define the health of your company. The process, in short, means developing a budget that covers three years of monthly projections for your business in these three areas:
1) Income statements;
2) Cash flow statements;
3) Balance sheets.
An experienced leader tracks his KPI’s weekly, monthly, quarterly, and annually. He knows exactly where the company stands financially at any given time. KPI’s make up the financial information a leader needs to make strategic decisions: to buy a building, increase inventories, or purchase new equipment.
While having a successful business plan defined in terms of these six key components won’t absolutely guarantee that your company will be successful, not having one will almost inevitably lead to failure.