For many business owners, the prospect of writing a business plan for the first time can be a daunting one. However, with the right approach and tools, it needn’t be. The trick lies in using a tried and tested process which guides you through the necessary steps. Let’s take a closer look. What is the difference between a business plan and a strategic plan?
- A strategic plan is mainly used to implement and guide the strategic direction of an established organisation.
- It is long-term, at around 3-5 (or more) years.
- A business plan is usually used for a start-up, to obtain funding or investment, to test the feasibility of a new business idea, or to take the operation of an existing business forward.
- It usually just spans a year.
- Where a strategic plan is in place, the business plan will include its elements – and bring in additional information.
Typically, whether for a profit-making or non-profit organisation, it should include the following sections.
1. Executive Summary
This preface provides an overview of the business plan, summarising the document’s key points in a clear, concise way. For many people, it is the most important part of the business plan itself and tends to be written at the end.
2. The Company
This brief section describes your company or organisation and includes:
- The nature of your business
- Your critical success factors
- How your products and services will meet the needs of your target audience
- The definition of your target audience.
3. Business Summary
This describes the current position of your business in relation to its operation, customer base, market, competition and so forth. The section will provide a snapshot of where the company is currently at and explain its business model.
4. Products and Services
This lists the product and/or service offerings of the company. This encompasses both profit-making and non-profit offers.
5. Vision, Mission, Purpose
We have covered the vision, mission and purpose in detail, and these vital attributes will be detailed here. This section will be key for non-profits, particularly social enterprises and businesses that engage in purpose-driven marketing. Interestingly, today’s stakeholders are becoming increasingly interested in the values and purpose that underpins corporate missions, so it’s wise to spend time on this and the financials!
6. Marketing and Sales
This section will likely be comprehensive, covering the market analysis affecting the company’s competitive position. To analyse this, business plans will usually include tools such as a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats), a PESTLE analysis (identifying political, economic, social, technological, legal and environmental factors that interplay to affect the businesses) and a Strategy Canvas, which essentially provides a simplified, single snapshot view of your business plan. This section will also detail the profile of your ideal customer, defining key demographics such as age, geography, education, income and other socio-economic and demographic variables. It will also include strategies for reaching these consumers, such as designing customized business cards and other promotional materials. It will describe the company’s competitive advantage and the USP/s which allow it to maintain its competitive position in relation to competitor companies. A USP – or Unique Selling Point – should ideally be exactly that; unique, to allow clear brand positioning.
7. Strategic Priorities and Strategic Objectives
If a strategic plan is already in place, then the strategic priorities – ideally no more than three – and supporting strategic objectives will be detailed here. There will be a reference to the strategic plan and crossover information as required. This section will likely be omitted in a start-up business or market-testing plan.
8. Operations and Logistics
No company can succeed without detailed operational plans that explain how the delivery of the business plan is going to happen. This section will include every element of ‘doing’ in the company – from customer service to actual service delivery and supporting activities such as IT service delivery and telephony, fleet logistics, website development and maintenance, etc. KPIs may be included in the strategic plan, and targets will be explained where financial incentivisation is used to drive enhanced performance.
9. Key Performance Measures
These measures will include the most important measures of strong performance and show stakeholders exactly how success will be managed. There is an obvious crossover with the KPIs detailed in the strategic plan. There may be additional financial-based measures, such as classic profit measures, investor returns, etc. Don’t rely on spreadsheets for this part of the process. It is too important! Look at a good KPI Software product that will be allocated measures to real people and allow them to be easily updated.
10. Financial Forecasts
No business plan is worth it’s salt without solid underpinning financials! Many CEOs or business leaders have a financial background, and this section will take time and effort to develop and balance. The financial forecasts will detail the costs of delivery – encompassing everything from fixed costs, such as rent, rates and loan repayments, to investment costs, such as new software and variable costs, such as staffing and stock. It will also detail projected income targets, funding sources (gearing), investor information (explaining projected risks vs returns as appropriate), and other key pieces of financial data, such as expected ratios of financial health. Historical financial performance information will be included, as well as projections against current performance so that investors, banks and other bodies with a financial interest in the company can see trends and conduct their own analysis.
Points for success
Here are three useful points for business plan success:
Think about your audience
Remember that the business plan may be read by investors, current employees, potential employees, the media, shareholders, regulators and any kind of stakeholder. Ask what your stakeholders want to know, and answer those questions.
It’s typical for a business plan to be around 30-40 pages long, but remember to make it readable. Don’t confuse your readers with jargon. Use a professional graphic designer to typeset the report and design it with graphics, tables, colours and images to bring the content to life and to make it more accessible to your audience.
Don’t be daunted by the prospect of writing a full business plan and put it off! If you are an entrepreneur, a start-up, SME or scale-up, just begin with a few pages if necessary to formalise your ideas, and take it from there. Remember, too, that a strategy consultancy can help you to get up to speed with your business plan and strategy plan quickly and efficiently, saving you time and focusing your business for better results!
Finding the right process
At Intrafocus, we help organisations of all kinds of organisations develop their strategic plans and write their business plans. Our Strategic Planning Process (SPP) is proven to help businesses achieve their goals. To find out more about how we might help you, please contact us for a no-obligation chat about your needs.