A business plan is an essential part of every successful business. Whether you’re at the very beginning of your journey as an entrepreneur (or expanding a long-running endeavor, Wise business owners know that there is great value in planning. As a result, they take the time to create and maintain a business plan. However, it is helpful to realize that there are at least 3 different types of business plans. Each plan serves a different purpose. Here they are.
START UP OR REFOCUSING PLAN
This is a detailed plan that helps you think deeply about your business and where you see it going long-term. This is the plan that most people are familiar with. This plan typically takes days and often weeks to develop. It requires much research and analysis and may be relevant for up to 5 years. It is the type of plan I recommend for people who are just starting a business or whose business is at a major transition or refocusing time. I am not going to go into detail about this business plan but here are the major sections that must be included:
- Executive Summary
- Business Overview/Company Summary
- Products and Services
- Market Analysis
- Marketing Strategy and Implementation
- Management Summary
- Financial Plan
- Overall Summary
- Supporting Documents
In this Start-Up or Refocusing Plan, there will be much research and thought behind each of these 9 sections, with much detail written down. As a result, this plan may be anywhere from 25-75 pages in length.
As mentioned, when most established business owners think of a “Business Plan” this is what they have in mind. As a result most feel overwhelmed and paralyzed, concluding that their time is best spent just getting the work done. While I believe that this type of analysis and detail is critical in a startup or major transition, I do not suggest that business owners try to tackle this much detail every year. I recommend an Annual Growth Plan instead.
ANNUAL GROWTH PLAN
An Annual Growth Plan has 3 components:
- A Financial Plan – which is a budget projected out by month for the next 12 months. You will want to project your income and your expenses for each month. As you proceed through your year you will evaluate each month’s actuals to its budget/projected. By doing this you can make adjustments as necessary as you go through the year.
- A Marketing Plan – which is what drives your Financial Plan. There are at least 5 components to a good marketing plan: Description of your Ideal Customer, Your U.S.P. (Unique Selling Proposition), Your Marketing Mediums, Your Marketing Budget, and Your Marketing Calendar.
- An Operations Plan – which takes into account the 7 basic processes in every business. Goals are then set to improve each of the 7 processes.
This Annual Growth Plan is no more than 3 pages (one page for each section) and can be completed through our guided process in just a few hours. This should be completed every year, and then performance should be tracked against the plan.
Scenario Planning is a technique that is used when a company is in a rapidly changing or an unpredictable industry or environment. I guide business owners through a process centered around the “critical drivers” (those 2 or 3 things that will determine the future) and probabilities. Using this technique, business leaders are able to create the 3-5 most likely scenarios of the future and then map out a tentative plan of action for each scenario. This is not exhaustive but it gives the business owner an immediate starting point and plan of action if/when the scenario takes place. I have found this approach very helpful in the past couple of years working with people.
Much more can be said about each of these. However, this should give you a basic overview of how you can begin thinking about business planning. Are you looking for some guidance in what kind of planning you should be involved in? Contact us today to see how we can help!