Establishing an Effective Business Plan

“Look before you leap.”? That’s an age old adage for sure.? In the last issue of Theory and Practice, we talked about Organization and Planning.? In this installment, we’re going to apply that same logic to the front end of establishing your business.? For sure, there are a bunch of hoops you will need to get through including sound documentation, a good understanding of your financials and forecast, but let’s start with some solid first principles in effective business planning.?

There are a bunch of resources out there for you as an aspiring owner.? The resources are all pretty consistent.? An effective business plan focuses on the key elements and keeps things concise and easy to understand.?

A good plan clearly communicates the business idea, strategy, and goals to stakeholders. It emphasizes the need for a well-defined mission statement that captures the essence of the business.? It outlines the target market. It highlights the need to identify the target customers, their needs and preferences, and how the business will meet those needs more effectively than competitors.?

Further, a good plan moves on to strategy and tactics.? An effective plan outlines a unique selling proposition and describes how it will differentiate itself from competitors. It emphasizes the importance of a clear and compelling value proposition that resonates with the target customers.?

Next, an effective plan encompasses an operational plan.? This includes key elements such as the business's location, facilities, equipment, and personnel. Most importantly though, the plan defines the business's core competencies and how they will be leveraged to deliver superior products or services.?

A good plan also pays careful consideration to financials.? This should include the revenue model, pricing strategy, and financial projections. It will emphasize the need for realistic and achievable financial goals, as well as a clear understanding of the costs and revenue drivers. And don’t forget a plan to monitor and review the business plan regularly to ensure it remains relevant and aligned with the changing market conditions.?

Finally, it’s a great idea to spend some time looking at yourself and the members of your team.? The decision to launch a small business is not a small one.? I had a saying when in command of my first ship.? “The sea will find and exploit all weaknesses.”? It’s imperative to understand your level of emotional intelligence and your strengths and weaknesses as a leader.? Everyone that has gone down this road will tell you that this journey will be full of excitement, stress, and challenge.? Re-affirming your values, playing to your strengths, and finding others that shore up your weaknesses will come in handy for sure.?

At LLS, our professionals and the SMARTStart program are set up to help you along every step of this journey.? Reach out today and let’s talk about how we can help.?