The Basics of a Business Plan Part One

Business Plans are critical to any enterprises.  But there are enterprises that either have only a partial plan or no plan at all.   Having no plan is like a ship without a rudder; you will be afloat but are drifting at sea with no direction.
Business plans should contain all the disciplines of the enterprise. Discipline/divisions are areas such as sales, marketing, R&D, development, support, service, finance/accounting and service.
Key to any successful business plan are its mission, goal(s), objective(s) and strategies … and the plan must be reviewed periodically.  Without clear a mission, goals, objectives and strategies; everything else is just a waste of time. 
The other critical note is that each division/discipline must have its business plan (sub business plan) that supports the companies’ business plan.
Let’s look at the mission, goals, objectives and strategies in more detail.
Mission, states the company’s intent or what they want to be or known for or what is the company’s purpose and are typically long term in nature  Note vision statements are different then mission statements.  Vision statement is basically what your company will be if it accomplishes its goals and objectives.
Examples of mission statements are:
• Become the best provider of health care
• Be the most reliable automobile manufacturer in the USA
• Providing the best value for home security system
Goal(s)
Goals are absolute or specific targets that support the mission statement. Again, goals will be different throughout the organization, but must support the company’s goals
Examples of goals are:
• Increase revenues by 10% from last year
• Obtain 25% share of market in next three (3) years
• Reduce operation costs by $2 million dollars in this fiscal year
Objective(s) are tasks that will get you to those goals. Objectives will be different thought out the organization, but again they must support the company’s objectives.

Examples of objectives are:
• Increase prints ads to existing customers
• Attend the top four trade shows for the automotive industry
•  Hire more employees in the customer service group
Strategy is the “HOW” you will accomplish your goals and mission.
Examples of strategies are:
 *Being the price leader for your products (Wal Mart)
 *Product uniqueness/ differentiator or innovator   (RIM is one example)
 *Providing full service or integration of product and services
So regardless of the size of your company, or what industry you are in, or the what stage of the company’s life cycle; you need a business plan, every group must develop their own sub plan that supports the overall business plans and all plans must be reviewed and or updated on a regular basis.
Part Two will cover an example of a business plan outline
RHL   7/14/14

1 comment to The Basics of a Business Plan Part One

  • Could not agree more. Generally, if raising money is the objective of the plan, you want to demonstrate large market size and a great management team that has the expeirenece to execute on the plan. Could not agree more on clearly defining your objectives.

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