What Makes a Business Plan Great?

The Key Elements of a Successful Business Plan

Sound Business Model

Arguably, the most important aspect of a business plan is a sound business model.  There are several definitions of a business model, but they all answer the same basic questions

  1. How does the company generate value?
  2. How is the company compensated for that value?
  3. Who needs the value that company provides (target)?
  4. How does the company reach the target, and convince them to buy?
  5. How does the company deliver its value to the buyer?
  6. How do they keep them coming back?
  7. Can the company perform these tasks at a profit?

Marketing Plan

​The most important aspect after the business model is the marketing plan. A business plan lacking a strong marketing plan is like a car without gas.  It may look beautiful in the garage, but it’s not going anywhere.  Why is that?  The marketing plan is the element of the business plan that most directly impacts the business model. The marketing plan defines which people most need their product or service, why they need it, why they value it, how to reach them, how to motivate them to try it, how to deliver it, and how to keep them coming back. Without a solid understanding of these elements, the business model is unlikely to be successful.  The specific elements of a great marketing plan are covered in the marketing plan section.  Free tools and sample plans are available.

Objectives

​Clarity in your mission and vision helps the business better achieve its goals. Knowing what you do, and more importantly, what you don’t is very helpful in guiding strategic decisions, e.g. which markets to serve, which products/services to provide, etc.

Strategies

​Numerous business books have been written about strategy, but they all boil down to a common theme: making choices.  Strategy is about making informed choices that have a direct impact on your business model.  There are many tools that can be used to help make those choices.  The most common include: SWOT (strength, weakness, opportunities, threats), 5C’s (company, customer, competitor, context, climate), etc., and are available free of charge.

Financials

​It’s important to remember that the financial statements: income, balance sheet, cash flow, etc. are all outcomes of the plan, not the plan itself. These statements are only as solid as the assumptions put into them. The more effort that is put into the ‘guts’ of the plan, the more reliable the financial statement will be.  Free templates for income, balance sheet, and cash flow are available

Other Key Elements

  • Products &/or Services: Includes information on products and/or services provided, and at what price.
  • Manufacture or Delivery:  This section answers how you will create your product or service, how much it will cost, and how will you deliver it to your customer.
  • Resources: Captures needs in terms of people, capital, and cash on hand.
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