Taking action with your ideas should be fun, not stressful. So to ensure you have everything you need, follow this ultimate business plan checklist.
With the onset of a new year, it’s time to reflect and strategize, taking into account the lessons of 2020, and how they shape your company’s or idea’s path forward. When taking stock of your business (or concept) and both it’s short- and long-term goals, the most important thing is to create a quantifiable and actionable plan.
Business plans are both the ideal way of quantifying an idea, as well as reflecting on past progress or failures and how they changed your company.
Why Bother with a Business Plan?
As managers and entrepreneurs enter the new year, it’s important to take stock of a company’s strengths and weaknesses, take the opportunity to explore and study the competition, and consider how or where the company might be able to attract new clients, funding, or investments. A solid business plan acts as the distilled essence of what your business is, what it’s done, and where it might go.
But to create a solid business plan, you need a solid structure, and a foundation built on data and research.
Your Business Plan Checklist
Like any lengthy document, a business plan needs structure.
First, you should identify what audience you’re trying to target with your business plan – is it an internal document for management? Is it going to be primarily used to inform existing investors and secure new ones? Is it an elaborated mission statement to attract clients?
Then, you will need to address questions that your audience might have. These would be the individual sections the business plan will consist of each clearly answering a potential question with clear data. In general, a business plan checklist would look like this:
Describe Your Company and Industry
Depending on your audience, the first section of the plan will consist of an overview of the company’s purpose and its role in the current industry, as well as general information on the industry to help provide context for the company’s state and future.
What Are Your Prospects in the Current Market?
After going into detail on what the company does, it’s time to go into detail on the state of the market, and how your company is adapting to recent changes or aims to improve in light of sudden developments.
With the pandemic, countless industries have had to rapidly shift towards remote services, safe delivery mechanisms, rapid digitalization, and better software integration with mobile devices, among other concerns. How has your company adapted, and what are its prospects in the current market?
What is the Competition Up To?
No business plan is complete without an unbiased and objective view of the competition, particularly how it serves customers and clients in your area, and how you can further differentiate your business from other successful businesses around you.
How Are You Operating?
The next critical part of the business plan is a concise and comprehensive overview of its management and production, from how individual teams and departments are managed, how the organization itself is structured, how workplace policies such as remote work, coworking spaces, and work-from-anywhere policies have been implemented as a result of the pandemic, and how delivery mechanisms have been changed or implemented to ensure safety.
Another question is scaling – if your company is growing rapidly as a result of the shift towards digitalization, how are you planning to keep up with growing demand or a wider audience?
How Are You Marketing Your Products and Services?
The marketing portion of the business plan should report on the success of previous campaigns and tactics and plans in light of how the market has changed, and how demand is shifting.
Who are your customers, and what are they most likely to want? Can you identify what it is that they might want that they themselves aren’t aware of? And if yes, how can you leverage that to gain more sales?
How Healthy Are Your Finances?
How have your sales and revenue been holding up as a result of the pandemic, and what kind of growth are you projecting for the new quarter? A financial overview is often the most critical portion of a business plan for many investors who want to see raw numbers, and want to know how you’ve been holding up over the pandemic, and whether you have the potential to continue to grow your business.
Create Your Management Summary
The last thing you should work on should be the first thing in the plan – the executive or management summary, providing a concise overview of the contents of the document, the state of the business, and the purpose for this plan.
Essential Rules for a Well-Written Business Plan
It’s easy to go overboard with the jargon and flourish and turn your business plan into a wordy brochure. But shareholders and investors are people too, and their eyes glaze over just as easily as any other customer or client. You must keep your audience in mind when writing your business plan, and understand that there are a few key rules to follow:
1. Stay Concise
Avoid repeating yourself and avoid the use of industry jargon that might not make any sense to a general audience of investors and financiers. Save the flourish for your marketing campaigns, and focus on short, simple bullet-point answers for critical questions that you imagine the reader might ask.
Source your information heavily with references based on real market research, but don’t drown the reader in unnecessary data – keep it informative, and in the service of an actual point (such as explaining the potential demand for your niche or product based on market trends and surveys).
2. Focus on Your Differences
When describing your business and how it fits into the industry – especially when considering your competition and other similar companies – focus on what differentiates your company or idea from others and focus on the specific niche that you’ve carved out or plan to carve out for yourself.
In a world where modern technology gives us access to products and services from all over the globe, focusing on what sets you apart from the competition is more important than ever.
3. Provide Authoritative References
Regardless of whether your business plan is written to attract investment, reassure or maintain investors, or just to give you an updated overview of the company and its direction for the near future, it’s important to provide trusted references for the information you’re including in your plan.
We tend to try and focus on the positives when discussing an idea we’re fond of, or we tend to lean towards defending our practices and business, even when the writing is on the wall that a change of direction is long overdue. Reliable data is important to back up your belief in your business and provide readers with more than just a sense of your passion for the company.
The ultimate business plan serves as a referential document used to reflect on the company’s progress. In addition, to give a thorough insight on its unique purpose in your industry, as well as provide direction for the future.