Let's talk about business plan today.
There are two scenarios — you are planning to start a business (planning stage) and already have a business in operations.
You heard about business planning and I'm absolutely sure you have one right now. Here's a simple question for you.
How detailed are you in the business planning?
There actually 9 steps in creating a business plan for success. Plus, an additional 3 more steps shall you decide to sell off the business or closing it down.
Take a look at this infographic on business plan (you can find the explanation of each step after the infographic).
Stage 1 in Business Plan: Starting A Business
The Idea Stage
The first step in business planning is getting the idea right. You should do sufficient research to determine if the idea is profitable. This is the most time consuming and important step in the business plan. Take your time to calculate the risk factor as well as other financial opportunities during this stage.
Funds & Investments
This step is actually very simple but it is extremely nerve-whacking. Before you can start a business, you need to secure funds and typically, we recommend you to have at least 9 months of funds for rolling purposes. Most businesses will be below the red line (not profitable) within the first few months of operations and this is absolutely normal. You should also put sufficient funds into your marketing budget.
The next step is to create a SWOT Analysis where the main objectives are to identify the strengths and weaknesses of the business as well as external factors such as opportunity and threats. Ask us more on how we can help you with SWOT analysis.
Stage 2 in Business Plan: Managing A Start Up Business
Communicate Your Vision & Mission
You need to convey clear communication to your employees and external parties (such as marketing consultants like us). Most of the time, business owners fail to convey the right message to other parties and this lead to team members feeling lost due to lack of proper guidance.
Developing Accurate Reports
While I understand that trying to reduce cost is an important step for startups, you must be willing to invest in reporting tools such as for financial purposes. Such reports are going to help you generate accurate financial and growth forecast.
Comparing forecast versus actual
The best way to gauge your success in business is through comparing data from the forecasted reports with the actual ones. Slipping away from the forecast is common in the beginning. Once the comparison is done, make sure you share the content with your team during your meetings. When they take action and work closely with the top management, your business will have a better chance of success.
Stage 3 in Business Plan: Growing Your Business
Focus On Revenue Generation
This must be your goal from day one. Focus in revenue generation activities and set targets for your team (and even yourself). Each team/department/section would need to focus on their parts and if you are a lean startup, considering outsourcing works that you don't have knowledge in. You should spend the time focusing on closing sale and leave the rest to others who has the skill or knowledge.
Create Strategy For Growth
Take time to revisit your business strategy and focus on growth hacking. This phrase is critical because once you are on a roll, you should keep the momentum running and leveraging the advantage you currently have. Again, do not be afraid to work with business consultants in laying out new growth strategies for your business. In most cases, having an outsider view is always recommended as you might miss out some critical points.
Opportunities & Risks
When growing your business, taking calculated risks when opportunities arise is always recommended. After all, growth is all about taking the right risk, at the right time and with the right opportunity. Be on an active lookout for potential opportunities as you will never know what's coming your way.
Stage 4 in Business Plan: Exiting Your Business
Develop Exit Plans
Exiting a company (selling off, closing down etc.) is always a messy business. An exit plan would need to be developed and transition stages must be created. Exit plans must involve everyone including the rank and file employees.
By now, your business should be rock solid in most parts. If you are planning to expand your business, you should focus on expanding the business with more roles and making sure that the transition process is smooth.
If you are planning to sell it off or closing down the business, changes must be done in stages to avoid shock and unwanted distruption during the transition process.
Tip: Do not rush during the transition process to avoid complication in the future.
Identifying Financial & Regulatory Requirements
Make sure all the paperwork are in place is one of the most critical parts before the entire transition process is over. Seek consultation from your company's legal firm/representatives to ensure that you are not breaking any rules or regulations.
Summary: Creating A Business Plan
There 9+3 steps in creating a business plan. Most of the time, you would just need the first 9 steps to create a successful business. The last three steps are often a choice when you are planning to sell off the company or close it down.