When I tell business owners that they need to create a business plan, most of them cringe. From the conversations I have had over the years, I can tell you that many small business owners don’t have a business plan, even though they’ve heard over and over that they need one. Why is it that traditional business plans are so dreaded? The answer is actually quite simple: because they take a tremendous amount of time, and because they produce very little in the way of positive results.
You will note that I said “traditional” business plans are ineffective. Do not get me wrong, planning is critical for every business. But for whatever reason, the idea that a novel-sized plan is necessary has been accepted by the corporate business community. The truth is that a traditional plan is overkill for most small businesses. In fact, I have found over the years that a one-page business plan model is much more valuable for small businesses.
There are five elements that must be included in order for your plan to be successful.
The first is Vision. This can be just a sentence or two, describing where you want your company to be in three years. For instance, perhaps your goal as a landscaper is to be the most recognized name in the industry, in your city.
The second element is your Mission. It is simply a statement of why your company exists—what do you provide to your customers? Professional and affordable landscaping services? Expert financial consulting? At its core, what does your company do?
Third are your Goals. What must happen for you to achieve your vision? These should be more specific—for instance, maybe you need to pick up 25% more clients or reduce your labor cost by 10% over the next year.
Fourth are your Strategy and Tactics. How will you achieve your goals over the next three years? If your goal was to cut labor costs, your strategy could be to implement a new training program—or perhaps to hire more efficient employees.
The final element is your Action Plan. How, specifically, will you implement your strategies and tactics? Who is responsible for what, when will they start, etc.
While a 150 page business plan may make sense for a Fortune 500 company with plenty of resources to devote to the project, such a plan just doesn’t make sense for most small businesses. I’ve helped many of my clients create a one-page business plan that has revolutionized their company. If you would like more information, feel free to get in touch!
Do you have a business plan for your company? Is it helpful? When was the last time you updated it? Share your thoughts in the comments below!