Lesson Learned from Building a Business Plan. Entrepreneur MBA Podcast 3.54.
Summary: In today’s podcast, Chris Lalomia from The Trusted Toolbox and Stephen Halasnik from Financing Solutions discuss the importance of building a business plan for businesses. This solution is helping small businesses optimize the efficiency and productivity of their companies by providing a clear-cut roadmap that discountenances distractions from the set goals.
Lesson Learned from Building a Business Plan
Developing a business plan is essential for setting up any business venture. Business plans help entrepreneurs to ask and think through some salient questions. It’s a working document that guides business owners in the journey of putting things together that will facilitate the day-to-day operations of their businesses. Moreover, a well-thought-out business plan helps pitch startups to potential investors for fundraising.
A business plan is very useful for small businesses, especially in this period of rapid change. Ideally, a business plan is periodically reviewed and updated accordingly to accommodate changes as they occur. For instance, a new business plan is drawn for an existing venture that has decided to toe a new line of business.
Running a business without a clear road map is not ideal for entrepreneurs. Plus, businesses that tried operations without strategic planning became unsuccessful. However, there’re numerous benefits to having a good business plan, including infusing objectivity in decision-making. In addition, it helps owners of businesses to exercise due diligence by methodically evaluating all the available resources that will optimize the growth and development of their business ventures.
The Relevance of Business plans for Small Businesses
Well-crafted business plans help entrepreneurs have an overview of the goals of their ventures at a glance. Furthermore, they give more clarity than one’s gut and intuition. Statistically, small businesses that use business plans grow faster than those that don’t. Kickstarting a business without a working design may lead to unintended consequences down the line. Taking time to work out a plan for your small business is significant to check your venture’s feasibility and viability.
Essential Components of a Business Plan
A good business plan has some specific elements. However, while it’s a good idea to be detailed in your business plan, you should consider keeping it concise so that the reader would not be worn down with a lot of unnecessary details.
The salient features that entrepreneurs should endeavor to include in their business plans are:
Executive summary: This section highlights everything about the company, including the mission statement and the information about the company’s leadership, employees, mode of operation, and location.
Products and services: This part shows the company’s products and services. However, It can contain pricing, product lifespan, and benefits to consumers. In addition, you can consider including other information like production and manufacturing processes.
Market analysis: Owners of businesses should have a firm grasp of their market. A market analysis is a thorough analysis of a market within a specific niche. It helps entrepreneurs to answer the following question:
- Who are my potential clients?
- What are my customers’ buying habits?
- How large is my target market?
- How much are customers willing to pay for my product?
- Who are my main competitors?
- What are my competitors’ strengths and weaknesses?
Marketing strategy: An ideal business plan highlights the company’s grand plan for reaching prospective consumers and turning them into customers of their products or services. Marketing strategy includes having a clear line of distribution, mode of advertising, and marketing campaign.
Financial plan: Every business should capture its financial plan and future projections. In addition, there should be a financial statement, balance sheet, and other financial information for an already established business.
Budget: Any business should have a recurrent and capital expenditure budget. For instance, the entrepreneur should include the cost of staffing, manufacturing, development, and other expenses in the budget section of the B plan.
Types of Business Plans
Bplan is of utmost importance to businesses. A business blueprint helps entrepreneurs identify their objectives and focus on them. According to Small Business Administration, there are two types of business plans: traditional and lean startup business plans.
The traditional business plans are much more detailed in each section. Hence, they’re longer and require much work to produce. On the other hand, lean startup is very much concise. In this type of business plan, abbreviated structures are used to highlight key elements.
The Importance of Using One Page Strategic Plan
In today’s fast-paced world, time is of the essence. A concise strategic plan explains your business’s strengths and opportunities to stakeholders in a simplified fashion. A one-page strategic plan is an excellent tool that shows the business’s overall objectives at a glance. Unlike a traditional business plan, investors, advisors, and other key players are cool with seeing a one-page business plan because of its simplicity.
Entrepreneurs who crave to build a sustainable business should develop a working document to keep them on the correct path. The importance of business plans to businesses cannot be overemphasized. A Bplan gives a holistic view of what your business is all about. In addition, a strategic plan lays bare the cultural values, beliefs, and internal working of your organization. More so, it gives clarity about your task and helps you achieve concrete results. Adopting a lead business plan template will help you seamlessly maximize opportunities.
Finally, it would help if owners of small businesses from time to time consult experts in their line of business from time to time to acquire hands-on experience.
About Chris Lalomia from The Trusted Toolbox
Chris Lalomia is an Entrepreneur, Author, and change leader. He brings his own unique style to leadership to build a culture of professionalism in the blue-collar world of home renovations. He grew up in Jackson MI, went to college, and earned his Bachelors’s and Master’s Degrees in Mechanical Engineering. His path to business ownership was similar to most people’s journey to their current position which is
spinning and winding. His first engineering job was at Curtiss-Wright Flight systems making airplane parts, but Chris soon realized he needed to add some other business skills to his resume, so Chris joined Accenture and began working with large banks to help them merge, which led him to SunTrust (now Truist) where Chris transformed the commercial loan operations department. Before the great recession, he left the corporate world and started his own business – The Trusted Toolbox: Home Repair and Projects in 2008. Timing is not Chris’s strength but he survived and grew his business to a multi-dollar company. The Trusted Toolbox is about continuous improvement and allowing the “artists” in the company to show off their talents as they are set up for success.
About Financing Solutions
Financing Solutions small business financing product is a great alternative to a traditional bank line of credit because it costs nothing to set up, nothing until used, and when used, is inexpensive. The credit line requires no collateral and no personal guarantees. Small businesses use their line of credit to help with emergencies or opportunities when cash flow is temporarily down (i.e. Payroll funding) Please feel free to fill out the no-obligation, 2-minute business line of credit application here. The time to set up a credit line is when you don’t need it so that it is ready to be used, just in case.
Note: Financing Solutions donates 10% of its profits to various nonprofit charities