How to Write a Business Plan

Writing a Business Plan.

The great business plan debate- is it necessary? Is it a waste of time?

Some may say yes- times have changed and to a certain degree- I agree. What I don’t agree with is phasing them out completely. It is a great referral document for you to have on hand and if you ever look into getting bank loans or obtaining outside investors? You should have this available for reference.

I believe that the real significance of creating a business plan is not the finished product in hand or who you submit it to; rather, the value lies in the process of researching and thinking about your business in a methodical way. You do not have to complete the sections in order- but I recommend completing your executive summary last. Remember that this is a living guide that you should develop as your business grows and changes.

Below are the sections that you should include in your plan.

Executive Summary

Explain the basics of your business:  What will your product be? Who will your customers be? Who are the owners? What do you think the future holds for your business and your industry?

Company Description

What business will you be in? What will you do? What is your legal form of ownership (sole proprietor?) Include your mission statement, company goals and objectives: business philosophy, your industry, target market… your company strengths and weaknesses.

Products and Services

Describe your products or services. What factors will give you competitive advantages or disadvantages? What are the pricing structures of your products or services?

Marketing & Advertising Plan

Your marketing plan details how you intend to meet your customers’ needs and communicate the benefits of your products or services to them. You want to identify your target market and their needs and wants. Research your competitions strengths and weaknesses and think of how to position your brand, products and services so that your target market sees your business as better than, or different from, the competition.

Complete a S.W.O.T analysis and include it. (Download a free template HERE.)
Outline the budget and what avenues you think will work best for getting your message across.

Operational Plan

Explain the daily operation of the business, its location, equipment, people and processes. How and where are your products or services produced? How will you handle customer service, quality control, returns/refunds? How will you be storing your inventory? (If any), will you need to ship anything to your customers/suppliers?

Your Internal Organization

Who will run your business? Who is their backup should something happen to them? How many employees will you have? What experience will your employees need to bring to your business? How will you hire them? What benefits will you offer? What training do they need? How will you track their attendance and performance? How will you pay them?

Personal Finances

Show your assets and liabilities held outside the business and personal net worth.

Startup Expenses Planning and Forecasting

Estimate your expenses accurately and then to plan where you will get sufficient capital. It is best to overestimate than under. Consider all your startup expenses such as: legal work, logo design, business cards, brochures and marketing material, web site design, office supplies and furniture etc.

Financial Plan

This is what will ultimately tell you whether or not you are going to waste your time. Remember to BE REALISTIC when entering your numbers.

This section was/is the trickiest for me to explain- because it’s so important I found a handy template online- it was created by The Commonwealth Bank and it helps give you an idea of what you are looking at! Download the free template by clicking this link: Financial Plan Template by Commonwealth Bank

Also think about whether or not you plan on offering any credit to your customers- and how you will manage that.

Appendices

Keep track of the information that you used to come to your business plan conclusions. There is a lot of information in one document so it’s easy to forget sources! Even a copy/paste of the links will suffice.

So there you have it! Your business plan.

Take your time and enjoy this process- you will learn a lot about your business and yourself!

You vs. Them (How to Scope Out The Competition)

Competitive Analysis

COMPETITION/ COMPETITOR/ “THEM”

It’s a company/business/person close to you and/or your target market who offers the same or very similar service/product. You should know who your competition is and you should look to be familiar with their current offerings, marketing, advertising, promotions etc. You can scope out the competition online OR in person.

Depending on the size of your/their company – in person can be tricky. If you feel comfortable walking into their store then by all means go ahead and take note of everything from their customer service; their sales peoples knowledge, their sales; their POP displays (point of purchase) and their overall branding and consistency. You want to take a look at their promotions and how they push them and what they are sold out of (so you know what a popular sell is for them). Bring a notepad and paper and leave it in the car if you have to so you can jot down your “findings” as soon as you are finished. Now if you are a small business and they are a small business? Walking onto their territory in person may be too obvious and you don’t want to stir up any conflict…. I recommend getting your information online.

In the current age of transparency- it isn’t hard to see what you’re up against. With websites, blogs and social media- you can easily stay up to date with the information they choose to make public. “They choose to make public” are key words- you won’t know what is happening internally so it’s crucial that you follow them on a semi-regular basis. I recommend visiting their sites a minimum of every three months- you don’t have to break down a thorough competitive analysis every time! You can draw up a quick S.W.O.T analysis for each company based on your findings. (Click here for a previous blog post on S.W.O.T and a free template download.)

So you have their site(s) on your screen. What should you be looking for?

  • How cohesive all of their channels are (branding)
  • How they are similar and how they are different from you
  • What are they doing better than you (be honest with yourself)
  • What current promotion they are offering/ what have the offered in the past
  • Price comparisons (ecommerce- be sure to check shipping rates)
  • If you want to test their customer service? Send them an anonymous question and see how long it takes for a reply and judge the quality of the response
  • Read online reviews. What is the public saying?

You probably have a good idea of who your top competitors are. If not? A search engine check using business keywords similar to yours (along with your city) will bring their information up for you. A trick is to save a file with your competition’s internet addresses (website URL, social media handles, blog sites) so you can re-visit them with a quick click of the link. You can also save them in your browsers ‘favorites’ and bookmark them. I recommend setting up ‘Google Alerts’ for your industry regardless of whether it’s for your competition or not so that you are getting updates from all over as they happen.

CAUTION: Don’t become so enthralled with what everyone else is doing that you lose sight of yourself and your business. Frequenting their online resources will give you an advantage but at the end of the day you need to ensure that your brand is on point and that you are doing the best you can with the resources available to you. Don’t select your “competition” based on what aspire to become because that will set you up with unrealistic expectations which could lead to failure. It’s great to have goals and be inspired by industry leaders- but when it comes to comparing competition? Keep apples to apples.

SWOT Analysis: Strengths, Weaknesses, Opportunities & Threats

When was the last time you sat down and wrote a S.W.O.T Analysis for your company?

A year? Two years? Never? Don’t think it’s necessary?

BROCCOLI Consulting- Swot Analysis Template
BROCCOLI Consulting- Swot Analysis Template

I beg to differ.

For those of you who aren’t familiar with S.W.O.T, it is an acronym for Strengths, Weaknesses, Opportunities and Threats. It is a brainstorming tool that allows you to evaluate your company’s current standing both internally and externally. It’s important to review your company’s S.W.O.T on a regular basis because things change. The economy, your product/service, customers, trends and competition… nothing is guaranteed and you really need to be aware of where you stand amongst it all.

Some questions you should take into consideration when completing the analysis are:

  1. What are we doing well?
  2. What can we improve on?
  3. Can we expand?
  4. What is our competitor doing better/ next?
  5. What is our next step?
  6. How is our workforce?
  7. How are our facilities?
  8. How is our product/service compared to our competitors?
  9. What is our reputation like?
  10. Are we affected my emerging technology?
  11. How is our web presence? SEO?
  12. How is the economy right now? How will it be in a year?
  13. What current trends could harm you/ help you?

Ask yourself the above and categorize your answers under strength, weakness, opportunity or threat on a S.W.O.T diagram. For your convenience- please feel free to download a free, blank S.W.O.T .PDF sheet below.

Click Here to Download a Free S.W.O.T Analysis Template

Put some time aside in the near future to complete the assessment and use your findings to improve and develop your business strategies moving forward. You may be surprised with the results- sometimes the simplest alteration to your current disposition will send positive ripples throughout your organization!

Have fun!

Crystal Lengua