Simple Business Planning for Success

Kandace Heller

September 08, 2014

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It's become fashionable to question the value of business plans. Writers have recently commented that business plans can limit creativity and opportunities for entrepreneurs. A simple fact contradicts this idea. Most lists of the top reasons that businesses fail are chock-full of critical business planning topics that have been mismanaged or left unattended. (Why Businesses Fail) Failure to plan can leave even the best business idea DOA. The good news is that business planning isn't rocket science. Follow the common-sense steps outlined below to easily create a business plan that will help you avoid the early failure that plagues more than 50% of new startups within the first five years (SBA).

Business Description

Describe your business as simply and succinctly as possible. An easy way to do this is to answer these questions:

What products or services will you provide?
What is the market demand? (Research and quantify this so you're certain that adequate sales are available.)
How will you differentiate to beat the competition? In other words, why will customers choose you?

Management and Organization

Describe who will work in your business. Outline the skills and experience they bring to support the key differentiation that will ensure your success. Without this support, your plan won't be credible.

Marketing and Sales

No matter how wonderful your products, services, and people, if you don't get the word out you'll be swimming upstream. Describe how you plan to advertise and market your business, and how you'll manage sales activity. Remember to include realistic data on the effectiveness and cost of the marketing channels you plan to use.

Financial Management

Develop projected balance sheets, income statements and cash flow budgets looking forward at least five years. In creating these, identify how you will initially fund your business, what sales revenue and operating expenses you'll have, the timing of cash flows, and ultimately, your return on investment. It's also critical to think about risk management. As you create your financial plan, project the expense of appropriate insurance coverage for risks like property damage, business interruption, 3rd party claims, theft, and losses related to information security. Experts doing business insurance in Calgary, such as those at Thomson Schindle Green Insurance & Financial Services Ltd, can help start-ups acquire the basic level of protection and explain the usefulness of the different options.

Business planning doesn't have to be difficult, but it's very important. These simple steps will allow you to write a plan that's credible (critical if you're seeking outside funding), that confirms the wisdom of going into business in the first place, and that acts as the roadmap for your exciting new venture.