So, you are about to start a business? You’ve developed a great idea and you’re sure it will make money. That’s terrific! Now, you need people to invest in your idea and you want customers to buy your product or service. You’ll need more than a great idea; you need a great business plan.
Even if you’ve owned a business for multiple years or decades, it’s always smart to revisit your plan and consider if it’s still working for you. Your plan should not be a static document, but a growing and changing one that evolves with your business. So you’re considering adding a partner? Changing suppliers? Incorporating new technology? Take into account how any of these events might affect your initial plan.
In order to succeed, business owners must be prepared for the challenges the future might hold. According to a study in Harvard Business Review, entrepreneurs who write formal plans are 16 percent more likely to remain viable than the otherwise identical entrepreneurs who don’t create (and follow) a business plan.
In celebration of Write a Business Plan Month in December, here are a few elements of some of the best, and therefore most successful, business plans:
Determine the type of business that is best for you.
Ultimately, you should have professionals and business advisors help you navigate the choice of business structure that makes the most sense for your business. From C Corp to S Corp to LLC, the structure you choose influences your tax payments, as well as your personal liability to creditors and for claims against the business.
It is essential that you consult professionals and business advisors to determine the difficulties you might face in your industry.
For first-time business owners, consider: What will you do if your first few months don’t go well? What about your first year? Your first five years? What will you do if you lose a valued customer or supplier? If you need a patent or trademark and you don’t get it, how will you respond?
Remember, life happens. You are likely to gain far more credibility with investors, banks and other lenders if you establish realistic expectations, but prepare for the worst.
Plan for growing pains.
You would think that growing your business is a sign of success, and it is. However, you need to consider the types and amount of growth that make the most sense for your business, and it’s good to include those determinations in your business plan. What will you do if you can’t fill orders? How will you plan for adding more people to your team? You want to show others involved in your business that you’re also anticipating best-case scenarios and will handle those decisions responsibly by making jumps at just the right moments to capitalize upon momentum and seize opportunity.
Create a summary.
For business owners creating a long, detailed business plan,a one-page summary is key to grabbing the attention of your investors, lenders and other partners. While they will want to see you can provide data to back up your decisions and examples of how you will handle difficult situations, they often will want to read a summary before devoting the time to read the entire plan.It’s important you get their buy-in from the first page. Think about what will appeal to those reading your business plan and write persuasively to convince them your business will continue to succeed.
Emphasize your strengths.
While it’s important to spell out the challenges you might face, it’s just as important to include your strengths. What differentiates you from your competitors? What knowledge do you bring to the table that positions you as an expert? Or, how is your widget better than other widgets? Be clear and concise to show you know exactly how you will succeed.
Thankfully,there are many organizations available to help individuals with drafting and updating a business plan, from the York County Economic Alliance, Downtown Inc and Susquehanna SCORE, to the Economic Development Company of Lancaster County and Lancaster City Alliance,plus Pennsylvania Small Business Development Centers at colleges and universities statewide. In addition, there are many professionals who can help you, including our business attorneys here at Stock and Leader. If you are navigating starting a business, please contact Attorney Ron Hershner.