How to write an effective business plan

You may have a good idea and you may want to turn it into your business, so go for it … after you make your business plan. Business plans are written declarations of your business goals: what you aim to achieve, why you think you can reach these goals and how you plan to reach these goals.

Great ideas need to have detailed strategy. Your ideas may be excellent but if they are new ideas, you will need to face your critics. It’s harder to convince the skeptics that new ways of doing things can work, so be ready. Having a plan can help you prepare the replies to these objections and analyze what needs to be done to overcome the negative aspects that you may encounter.

Business plans differ for each industry yet they have some categories in common. Most plans will cover areas such as a Company Summary, the Market, Products and Services, the Management Team, Strategy, Implementation and most importantly, the Financial Analysis. There is no specific order in which they should appear; what is important is that these categories are addressed.

Although the summary is located at the front of the plan, it is written only after the company has laid out its plans; therefore, the summary is written last. Within the summary is the Mission Statement. Often made up of one or two sentences, this mission statement sets the tone for the direction of the company and its activities. We will discuss mission statements in this article. Other sub-categories would include The Keys to Success, where you would list the priorities you feel are important to your business and Objectives, which have criteria that can be measured. Since these categories vary, it would be useful to have an outline. 

The topics covered in a business plan (from http://articles.bplans.com/writing-a-business-plan/A-Standard-Business-Plan-Outline) makes it easier to understand what to be aware of: 

Company Summary: Catch your reader’s attention with a one-page summary on what makes the company special. Write this after you have done the other parts of your plan.

Company Description: Are you trading as a self-employed? What is your legal establishment? Who owns it? What is your history? What are your startup plans? Your location?

Products and Services: What are you selling and what benefits would your clients receive?

Market Analysis: Who will use your product? What are your customers’ needs? How will your customers know about your product? Who are your competitors? Potential customers?

Strategy and Implementation: Emphasize how you will differentiate yourself. Use data that you can monitor so you can keep a record to see how well you are doing. Be specific.

Management Team: Include management responsibilities, describe the management team members, their responsibilities, how they fit into the organization and their budgets.

Internet Access: Will you have a presence on the web? What use would your customers make of your website?

Financial Analysis: Start with your cash flow tables and move on to your expected Profit and Loss tables.

A good mission statement would answer the question: “Why does your company exist?” A company with a clear purpose gives its management team the courage to make decisions based on their mission statement. When there is a change of leadership, it provides uninterrupted succession. It prepares the employees with a sense of knowing who they are and what they are working for.

A clear mission is critical to the success of any enterprise. Consider, for example, what decisions would be made when a leader says, “We cheat, lie and steal. That is our corporate mission statement.” This clear direction, written in a few words, defines the group’s reason for being. All its goals, ambitions, decisions, negotiations and contracts will be consistent. Even the skills that the management team needs to possess will be determined by this company’s mission.

If you are an artist, your mission could be “To bring joy to people’s homes.” Walt Disney’s was “To make people happy.” While a company should be flexible and adjust to changing circumstances, there are some core values that would benefit the community if they should remain constant. Social responsibility and environmental management are values that employees can relate to. They can form part of the corporate mission. Although it may be tempting to concentrate on making money as your primary mission, most of the companies featured in the Fortune 500 list their mission in terms of the standards they want their service to provide. Darden Restaurants, a chain with over 1,300 branches in the US and Canada, for example, believe that their goal is “To nourish and delight everyone we serve.”

This week, try and form your mission statement. Keep it short and simple. Focus on how you really believe you can benefit your customers. Try it out on your other colleagues and see if it makes sense to them. The primary purpose of a mission statement is to unite your employees to work towards your goal. 

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Send your mission statements to aurorawilson@gmail.com.