When most people think about writing a small business plan, they think of a formal start-up document complete with charts, financial statements, and beautiful presentation. However, business planning just means writing a strategic plan.
What your business plan includes depends on who will see it and what your situation is, but if it’s just for you, less is more.
The purpose of your business plan is to evaluate whether your new business, opportunity or project is feasible. Do you have the resources to accomplish your goals? If so, what tasks are involved, who is responsible for each, and when are the deadlines. Here are four common types of business plans you may want to create.
Type #1 – New Business Plan (aka Start-up)
This type of plan is essential for any new business, large or small. While you don’t need to fill out every worksheet in a business planning book, you do have to think through each aspect of your business.
- Is this opportunity viable and worth committing resources towards?
- How will you define success?
- What resources, skills and capital will you need to start?
- Who are your target clients?
- How will you make money?
- How many products/services will you need to sell to break even each month?
- What are your monthly expenses?
- What are the risks of starting this business? What if you fail?
- Will you be happy as a self-employed individual?
Type #2 – New Direction/Opportunity SWOT Analysis
A SWOT analysis is a quick way to look at your business and marketplace to improve your performance or to uncover inefficiencies. A SWOT analysis identifies four key questions:
- What are your strengths? What does your business do right? What are your competitive advantages? Why do your clients choose you over your competitors?
- What are your weaknesses? What do your competitors do better than you? In what areas are you weak? Which skills or resources do you lack that impact how clients perceive you?
- What opportunities do you foresee? Your marketplace changes rapidly as new businesses and technology enter while others leave. What are the industry trends? What could you take advantage of? What do you predict clients will want in the near future?
- What possible threats loom? What changes could impact your business? What new players or technologies might alter how things are done? Is the marketplace shrinking due to lack of demand, more competition or alternative choices?
Type #3 – Project Management
A project management plan is the nitty-gritty “how to” involved with completing a project. Like its name suggests, project management is strategic planning at the project level. At higher business planning levels, you prioritize where to allocate your resources. Once you know what projects to take on, project management includes:
- What are the project’s goals and objectives? Why are you taking on this project and what do you expect to accomplish?
- What are your key milestones and deadlines?
- How much will this project cost you?
- What takes are required for each milestone?
- Who is responsible for each task – and by when?
- What are the key deliverables?
Type #4 – Recovery Plan
Many businesses face slumping sales or cash flow crunches and need to quickly increase revenue. With a recovery plan, the focus is often restructuring or reallocating resources to those that directly produce income while working towards solving the current problem. Recovery plans involve
- What is the current problem and what caused it?
- What are your current metrics, especially cash flow and revenue figures?
- What business assets can you quickly turn into cash?
- What other ways can you bring in revenue quickly?
- How likely will you achieve your target?
- What are potential solutions to the current problem so it doesn’t happen again?
- What happens if you can’t turn the business around?
With any business plan, the key to success is not in writing the plan, but in taking action. A great business plan is useful for strategic decision making as well as providing an action-oriented blueprint for daily, weekly and monthly oversight.
It is also useful to schedule regular reviews to ensure you are meeting your sales quotas, course correct, and assess new opportunities that may have arisen since the plan was created.