Every business needs a solid and long term business plan. This plan should include all of the elements you want to concentrate on as your business grows including intangibles like your vision and mission statement. A business plan does need some degree of flexibility in it to keep up with changes in your industry field, but it should be solid enough to show prospective investors, employees and other interested stakeholders where you see your business being in five years time. Even if your business model is offering services to online clients you need to formulate a business plan that show how you intend to grow your business and what are the key things in your business that makes you stand out from your competition.
What is a Business Plan?
A business plan is like a road map for your business. It shows what your business will do and the goals you have for your business. A good business plan will highlight all the major areas of your business and show what makes your business different from those of your competitors. Most business plans outline goals for the next 3 – 5 years including financial forecasts, marketing strategies, operational goals and the impact your business might have on the environment. The environmental aspects of your plan might include your projected carbon footprint for example or how your business might positively impact your local community.
Why is a Business Plan so Important?
It has been said that a company without a business plan is like a journey with out a destination. If you don’t have a clear vision on where you want your company to go then you are likely to either spend your time going around in circles or worse going backwards. Your business plan will show what your objectives are for the next 3 – 5 years; the timelines for how long it will take to reach your goals and an outline of your products and how they will differ from others in the market.
Your business plan will be useful in helping you determine when you need to employ staff or outsource part of your business. If you need to raise any finance for your company then your business plan will show potential investors how you plan to repay the money. Your joint venture partners might be interested in your business plan if they are thinking of working with your company over the long term and if you ever decide to sell your business then your business plan will help show potential buyers the essence of your company.
Even if the only person who is going to see your business plan right now is you it should still be done. Your business plan will help sharpen your goals and ideas; it will be motivational when you are having a down day and it will provide you with a benchmark for the different goals you want to achieve with your business. By regularly comparing your forecasts to your actual financial goals for example you will be able to see if your projected growth for the company was under or overestimated and you can tweak your further future goals accordingly.
What Should be in Your Business Plan?
There are no set formulas anymore for what a business plan should look like however all business plans do include some common elements. These include a cover page, and executive summary or table of contents and an overview of your business. Your plan should also include your business goals, an indication of how you intend to meet those goals, some financial forecasting or targets and what skills and resources you have at your disposal to ensure your business will meet its targets. If you have any supporting documents such as bank balance sheets or proof of potential income then these should be included as an appendix to the main plan.
Now all of this might sound very official especially if you want to just have a business model where you create and sell products to online customers. But that is the whole point of a business plan. It provides you with an opportunity to think of all of the little things that go into making a business successful. You might have the best products imaginable but if people don’t know about your product line they are not going sell. So you need a marketing plan. There is no point in selling your amazing product for $2 per unit if it is going to cost $3 to produce so you need a pricing strategy. Likewise you need your financial forecasts to show you have thought about the hidden costs of running a business like bank fees and taxes. Can you of it but sooner or later you will have rent to pay and your financial forecasts should reflect this. You might have a good idea for one product but that is not going to get you very far in terms of business growth – your strategic objectives should be able to show your second and subsequent product launches and when they will be rolled out.
If you have never done anything about a business plan before this might sound really daunting. However if you go online you will find a huge number of free resources that will help you to create your business plan.
The Importance of a Vision and Mission Statement
Part of your business overview section in your business plan should relate to your vision and mission statements. Vision and mission statements are part of your strategic planning and they show where the company wants to go and how you are going to get there. A vision statement is like an overview – it is where you ultimately see your business in terms of what it is going to offer others. The vision statement is a long term view of your business overall. From this vision mission statements can be developed to show how your company is going to achieve that vision.
Your mission statements should all be written with the customer in mind. So you want to think about is specifically “What” your company will do; “How” your company will do what it will do and “For Whom” your company will do what it does. The “What” relates to why your customers buy from you – whether it is a service or a product. The “How” is the actual products afford to pay yourself a wage? You might be prepared to work for the love and services you will sell and the “For Whom” will be your customer demographics – age, income, and things like that. If your business will only be operating in a certain geographical area then you would mention that in your mission statements as well although with an online business in most cases your customers can come from anywhere.
Once you have written your vision and mission statements your strategic planning process can stem from there. The most effective strategy for new or small businesses is to use the vision statement to idealize where you want your company to go and then think of where you are now. Your strategic planning process will outline where you go from where your business is today to the point where you have reached your vision statement over time. You can set goals with specific timeframes and measurable outcomes to ensure that your business is on track at any point of the process.
The purpose of this series was to help you stay focused as you work on your online business. You have learned just how destructive procrastination can be for your business in that it can cause you to miss deadlines which in turn can impact your service level to clients. Procrastination leads to unreliability and as most successful online businesses are based on trust that unreliability can be the death knell in your business.
To help guard against procrastination that can stem from feelings of being overwhelmed we looked at the importance of prioritization and sticking to a schedule. Prioritization can help you to focus on the three core elements of your business – revenue generation, administration/customer support and growing your business. If your tasks are not related to at least one of those three core items then you shouldn’t be doing them during your working day. Your schedule will keep you on track provided you ensure that you have set realistic time chunks for the things you want to do in a day.
Never underestimate the importance of networking and building your skill base while staying in tune with what is going on in your industry niche.
Finally create a business plan if only for the fact that by doing so you are making your online business your official way of making your income and living the internet lifestyle that so many people dream about. By staying focused and working on your online business everyday you will be successful and your vision will become a reality.
