Betty MacLeod, sales manager, small business, Vancouver Downtown and West RBC Royal Bank
A business plan is essential to every business. Successful business owners know that a business plan is a roadmap that will guide them from the start of their business through every business cycle. There are seven key elements to a good business plan.
- Executive summary. Pay special attention to this section because many readers will never go beyond it. It sets the stage and tone and should include an attention-getting cover page, like your company logo and/or a picture of your product or service in action.
- Your team. Your business is only as strong as your people. It's critical to outline your team's skills and how it will help bring your product or service to market.
- Business environment. Provide an industry overview and how you will position your product or service. Clearly describe what your company offering is and how you will differentiate yourself.
- Marketing plan. Your marketing plan includes everything you do to get your customers to buy your product or service. Do your research. Include your strategies for increasing sales and the tactics to get there.
- Operations. Address the day-to-day running of your business. If in early stages, this will help you develop your product or service. If you've already developed it, identify what is still required.
- Finance. Determine the type and amount of expenses your business will incur. Show the expected results and projections. For an existing business, include financial statements from previous years. Be realistic in projections, including best and worst-case scenarios.
- Risks and conclusions. Every business has potential risks. Outline these and include solutions. Show that you understand the risks and have made provisions.
For sample business plans and other resources, check out our site: rbcroyalbank.com/business/resources/.
Shannon Ward, co-founder, OnTrack Media
There is one key element of a business plan that is almost always overlooked but can have a bigger impact on a new business and its owners than any other element. What could be so important? I feel strongly that if you go to the trouble of creating a business plan, then it should include a frank and realistic assessment of how you see your business mixing with your personal life.
Ask yourself: what are your business goals and what are you willing and unwilling to do to achieve those goals? What life changes do you foresee in the next five years and how do you expect that to affect the business? What, outside of money, are you going to demand from your business? How will you define your business success?
Thinking ahead, defining goals beyond revenue figures and setting boundaries between work and personal life from the beginning will help you avoid building a "gilded cage" business. This is the kind of business that may provide you with financial gain but it can also trap you, leaving you with little time or energy for anything outside of the business. We see so often entrepreneurs who sacrifice themselves and their relationships while they relentlessly pursue some version of success that ultimately leaves them empty once they've achieved it. It doesn't have to be that way. It's possible to be successful in business while thriving in other areas of your life.
If having freedom and flexibility in your business is important to you, then ensure those factors are adequately addressed in your business plan. The three critical areas that create business freedom are people, processes and technology. These three elements need to work together seamlessly to provide you with the business you've dreamed of.
Wanda Halpert, president, Concord Business Plans
Potential investors want to have the answers to important questions directly in front of them. These questions are usually "how much money do you need to raise?", "how will you spend my money if I invest?" and "how much will I make in return?" In many business plans, this information is scattered throughout the plan and difficult to find.
Most business plan templates will tell you to begin your plan with long poetic paragraphs of information called the "overview" or "introduction." Investors
do not have the time to read 25 to 100 pages of text to find the answers to their basic investment considerations.
I suggest you make a highlights page that features the key elements of your business plan up front and centre.
The highlights page is a simple one-page list that features the key elements of your project. It can be placed in the beginning of your plan, before the overview or introduction.
This page will have essential information, such as:
- company name and location
- industry sector
- unique selling proposition
- market size
- funds sought
- use of proceeds
- revenue projections
Once you have completed this list, you can add a graph of your revenue projections underneath to fill out the page or a picture of your product. Now you have an introduction that is not only attractive but also has the advantage of offering investors the key elements of your business plan on the very first page.