Even if you have a business plan already in place, it may be time to update your business plan. This post is about providing the procedures for developing or updating your company’s business plan so that you can properly set up your firm for success. If you want to know how long it will take, I would say that most companies can create the plan in about 2-5 days, depending on size and preparation.
Here are some general guidelines in creating or updating your business plan:
1. Make sure all data is accurate. This means having up-to-date numbers on operations (sales, employees, etc.) and planning for the future (financial projections).
2. Consider the size of your company. How large is it now? Where do you want to take it in the next three years? How much money will you need to grow the company to that point?
3. It is also important that you have a realistic goal for your business. If you are not profitable, it will be difficult to sustain growth without additional capital.
4. Think about how you will promote your plan internally and externally (new hires, outside investors, etc.).
5. Be sure to set aside enough time to review your plan before you present it. Remember to leave room for changes and updates based on feedback along the way.
6. Your business plan should be concise and written in a manner that others can understand without too much effort.
7. It’s critical to keep in mind that your plan may be modified as your business evolves and grows. The plan is not static but dynamic. You should always be planning for success!
The following items are recommended in creating or updating your business plan:
- List all of your operational costs, including but not limited to:
- Payroll Taxes
- Sales Tax (for some states)
- Advertising & Promotion Costs
2. List all of your fixed costs, including but not limited to: These are the expenses that you incur each month regardless of sales volume.
- Rents (commercial and/or warehouse)
- Property Insurance (if applicable)
3. List how you plan to increase revenue, including but not limited to: To grow your company, you need to increase income.
4. List the ways that you will decrease expenses, including but not limited to:
5. Make sure your financial projections are realistic based on the information given above.
6. Include a brief description of your company leadership and management team, including but not limited to: What roles do you, the owner(s), play in the day-to-day activities? What is each staff member’s job title? What are their roles and responsibilities? Who do you consult for advice or assistance in the company?
7. Include a brief description of your company’s products or services. What makes you unique? What value does it provide to customers, employees, vendors, etc.?
8. Include an executive summary of the above information.
9. Include details about your company’s growth, including the number of employees, projected commissions, commissions by the market, our product line, etc. This is important for future reference in raising capital if needed.
10. Include a list of business alliances (see definition) that you have formed with other companies including but not limited to:
- Joint Ventures
- Business Partnerships
11. Include a list of companies that you have sold or intend to sell products or services to include but not limited to:
12. Include the goals and objectives of your company for the next three years. This can include sales volume, number of employees, operational costs for the next three years, etc.
13. Include a list of any legal actions or litigation your firm is involved in, such as: If you’ve been served with a lawsuit, include a brief description and the purpose of defending against it. Include all outstanding legal cases against your firm in this section. Often investors will ask to see the legal history of a business before investing.
You should now have an idea of what items to include in your business plan. This is not meant to be a long list; rather, it’s intended to highlight the most important things.
Please note that these are guidelines, and pro forma templates may vary depending upon the type of business, product/service offered, customers targeted, etc.
The point is to be comprehensive in your explanations. As you complete your written business plan, you may discover areas of improvement for your organization along the way which will help you grow!