5 Keys to Success in Your Business Plan

Written by Dave Lavinsky

5 keys to success

The right business plan will allow you to:

  • Create better business strategies
  • Create a clear roadmap to grow your business
  • Raise funding (if needed)

The five tips below will guide you to a stronger business plan that is more likely to achieve these goals.

5 Keys to Success in Your Business Plan

1. Research Before Writing Your Plan

Before putting pen to paper on the business plan itself, there is a significant amount of research needed. The research into the opportunity may uncover challenges you will have to face, in which case your plan must address those. You may find opportunities for additional customer segments you were unaware of. You may also find that the challenges will be very difficult to overcome and your idea must be drastically altered or discarded. Now is the time to make that decision, before you have poured weeks and weeks into a business plan.

2. Show a Clear Market Opportunity

Showing a clear market opportunity in your plan requires both a description of customers who need your product or service and competitors against whom you can build a competitive advantage. You must prove the size of the market is large enough to sustain growth, even if new competitors arise. You must show that your strengths will take advantage of the weaknesses of your competitors, allowing you to compete on qualities beyond price whenever possible.

3. Fill Logical Holes In Your Plan

The business plan is a logical argument, showing an opportunity, the resources you have or will have to take advantage of that opportunity (management team, intellectual property, cash, location, etc), the methods you will use to do so (your marketing and operations plans), and the results you expect to see (your financial projections and growth) which funders (including VC funding, angel investors and banks) can take part in.

Each of these four pieces must be coordinated with the others, and holes in the logic must be filled and not ignored. For example, the financial results or rewards must be appropriate for the inherent risk you face in taking on the opportunity.

4. Explain Your Financial Assumptions

Financial assumptions which drive the revenues and costs of your financial plan must be explained at some point in your plan. What these assumptions are and their validity should not be left up to the imagination of the reader, as he or she will likely imagine that unexplained assumptions are based on nothing but the entrepreneur’s extreme optimism.

5. Use a Standard Business Plan Format and Structure

The format and structure of the business plan must be professional, clean, and close to the standards used by business plan writers. This means referring to direction on the proper business plan format and outline and not using creativity in these areas. Creativity can certainly enter into the marketing and operations sections, but the plan should not have a distracting format or structure.

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Our fill in the blank business plan delineates the 10 key sections you must include in your plan, but they are listed below too for your reference:

I. Executive Summary: in your business plan’s executive summary, provide an overview of your business, list your success factors (that is, what makes you uniquely qualified to succeed), and provide an overview of your financial plan (what are your topline financial projections for the next five years, and if you need funding, how much and for what uses.

II. Company Overview: discuss your company’s history and answer the following questions:

  • When did you conceive your business?
  • When did you start it?
  • What type of business are you (e.g., C-corp, sole proprietorship)?
  • What accomplishments have you achieved to date (e.g., developments, sales goals, new store opening, etc.)?

III. Industry Analysis: provide an overview of your market in terms of your market size and trends. Also detail your relevant market size which is the number of customers in your target market multiplied by the amount they might reasonably spend on your product/service each year.

IV. Customer Analysis: in the customer analysis section, discuss who your target customers are and their wants and needs.

V. Competitive Analysis: define your direct competitors and strengths and weaknesses of each. Give an overview of your indirect competitors. Define your areas of competitive advantages.

VI. Marketing Plan: in your marketing plan, discuss your products, services and their pricing. Discuss the promotional methods you’ll use to attract new customers. Finally, discuss your distribution plan if customers will purchase from you in ways other than visiting your storefront or website (e.g., via distributors).

VII. Operations Plan: Here you will describe the key operational processes you need to perform on an ongoing basis to run your business. Also discuss the key milestones you hope to achieve as you grow your business.

VIII. Management Team: in this section of your plan, discuss the bios of your key management team members, mention any gaps you still need to fill, and if applicable, profile the members of your Board.

IX. Financial Plan: describe how you generate revenue, show your financial projections for the next five years, explain if you need funding and and so, how much and for what purposes, and discuss your exit strategy if you’re seeking equity financing.

X. Appendix: provide any supporting documentation such as customer lists, lease agreements, patents, etc.

Including each of these business plan components is critical to ensuring your plan is complete and ready to be implemented.

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