A valid and transparent business plan is an important factor for success in sustainable business development. Regardless of whether you are an entrepreneur or an experienced market player, with a reasonable business plan you not only improve your possibilities of getting funding but also in controlling and monitoring your business.
Strategy & Positioning
A solid business plan is based on the analysis of both internal and external factors. The internal analysis is all about your story. Within a positioning process you get clearness on ‘who you are’ and ‘what you do’. You’ll define the personality and character by which your organization will be recognized as well as the value you bring to your clients and why they invest in your products and services. We call these ‘Key Differentiators’ and we understand how this incredible force can fuel your success.
The positioning ends up with articulating and sharing a clear vision and corresponding strategic goals. Based on a Roadmap from Home Base, where your company is currently winning most deals to the Sweet Spot, where your company is heading, you can create a convincing business plan with the right focus on the right resources.
The external analysis is all about opportunities and threats resulting from economic, political and industry trends including the size of the market, market growth, job market and competitors.
Key Planning Principles
To create a reliable business plan both qualitative and quantitative goals should be measurable and have a timeline. Also a business plan should be consistent and transparent on the assumptions and focus on the essentials. Since we can all accept that the future is uncertain, this should not keep you from planning, as this uncertainty can be reflected by building scenarios (e.g. best case, most likely and worst case).
Financials
Summarize your strategies and assumptions into how much money they will make and how much they will cost you in an income statement for the current and at least next year. The starting point is a forecast for the current year based on the year to date number. To increase transparency, detailed plans especially for revenues, people, marketing, investments and funding are recommended. Beside absolute numbers, operating numbers such as return on sales, cost of materials or personnel costs are other useful planning elements. Even for start-ups and growing businesses a cash flow plan is very important to determine if and when you will need to raise outside capital.
To control your business success you need to compare budget figures with actual figures, ideally by the month. The analysis of crucial variances and the calculation of their impact on your business is an important part of the monitoring cycle in order to be able to react in time if action is required.
However it is not the result of the plan that is most important, it is the process of creating the plan and getting clearness on where you are and where you want to be.
