This blog was authored by Cheree Warrick.
Whether or not you are raising capital or simply need a business plan to grow your business, each business plan has 7 items that are MUSTS.
1.Discuss the WHO – Who would buy your product and why?
One of the best things you can do as a business owner is create a customer avatar. For example, Ulta Beauty Store’s avatar is a millennial female age 30 who works in a professional environment and spends a disproportionate amount of her money on clothing, shoes, and beauty items. Nascar’s avatar is a middle aged man living in the midwest who loves the roar of a car engine. (Of course I made these up but you get the gist). It’s important for your business plan to clearly describe who is the most likely person to buy your product, what their motivations are, and how you’ll identify them.
2.How many people will buy your product?
The best business plans are specific and realistic. When I write business plans for restaurants, we state that the location will serve 270 meals during weekdays and 320 on weekends. A business plan for an app would say that it would attract 500,000 daily users in 3 years. Your reader will review the size of your market and your goals. Then he or she will ask, “Is this business goal reasonable? Do I believe it can be achieved?”
3.Discuss your revenue streams
How does the company make money? Some businesses have easy or obvious revenue streams. For example, a restaurant serves meals. However, others are not so obvious. For example, many apps and social media sites fail to properly discuss why it will be different and how they’ll be able to monetize users. The best business plans do both.
4.Create an easy to implement marketing plan
In Item #2 of this blog, we mentioned that you must identify the number of people you will serve. In this item, we discuss how you will attract these individuals. In other words, how will you get and keep customers? The best marketing plans are simple. For example, you and your team may implement a social media strategy that includes 1 weekly blog, 3 daily posts, 2 weekly video posts, and 1 monthly infographic. A beauty salon may choose to locate clients using Guilt or other daily deal sites.
NOTE: Never have one way of bringing in clients. You should have a minimum of 5 ways to attract customers and spend at least 15%-25% of your time retaining the customers you have.
5.Discuss your team, highlight their accomplishments, and list their Key Performance Indicators
Have you really hired the right people? Do they have the management skills and industry expertise to help the company reach its goals? If you have a vacancy, it’s the ideal time to discuss the type of individual you want to fill that job. It’s also important to list each person’s job responsibilities and key performance indicators (or a quantifiable measure used to evaluate the employee). For example, your Chief Marketing Officer may be evaluated on his or her ability to bring prospects to your website and convert them into leads for your sales team. Your restaurant’s general manager may be measured on the ratings received on Yelp and Google.
6.Financials: Take a serious look at profitability and cash flow
I have read many articles recently (and also received confirmation from the angel investors I know) that the days of companies raising hundreds of millions of dollars without an ability to show profits is no longer occurring. The quicker you can become profitable, the better.
7.Can your business grow into a scalable enterprise?
If you are growing a company with hundreds of employees and millions in revenues, then discuss the growth plan for your company.
About the Author
Cheree Warrick is a business plan writer and author of Creating Business Plans that Actually Get Financed. For more about business plans, visit theprofitpartner.com and to learn more about building your business register for NAPW’s free Building Your Business Webinar on June 7th 2017 1pm EST.