Have you finished your business plan for 2022? Have you started it? Do you operate without a business plan? Regardless of the size of your business, you are best served by creating and updating a formal business plan each year. Few companies have been able to stick with their plan the last two years, but it is still important to have an overall vision and strategy for your business to use as a foundation for any kind of pivot. The coming year is sure to be filled with more unique challenges, making it even more important to put your plan in writing. Here we look at some of the key components of a small business plan.
Executive Summary
“An executive summary is the brief introduction to a business plan. It should describe your business, the problem that it solves, your target market, and financial highlights.”
Business Description
“The company description outlines vital details about your company, such as where you are located, how large the company is, what you do, and what you hope to accomplish.”
Organizational Management
“Each organization determines the structures, rules and the mutual relationships of its individual elements, such as people, processes, technology or strategy.”
Market Analysis
“A market analysis is a quantitative and qualitative assessment of a market. It looks into the size of the market both in volume and in value, the various customer segments and buying patterns, the competition, and the economic environment in terms of barriers to entry and regulation.”
Sales And Marketing Strategy
“Your sales and marketing strategy is your plan for reaching, engaging, and converting target prospects into profitable customers. It's the charter that guides marketing and sales in their daily activities, helping them clarify shared objectives and how to achieve them.”
Financial Documents
"The financial section of your business plan should include a sales forecast, expenses budget, cash flow statement, balance sheet, and a profit and loss statement."
Financial Projections
“In its simplest form, a financial projection is a forecast of future revenues and expenses. Typically, the projection will account for internal or historical data and will include a prediction of external market factors. In general, you will need to develop both short- and mid-term financial projections.”
Funding Requirements
“Let's face it - running a business requires you to be goal-oriented, self-reliant and flexible. But no matter how budget-minded a business owner may be, there comes a time when you need cash - fast.”
The last two years have brought about an immense amount of change to how small businesses operate, reach and serve their customers, and plan for the future. While there will always be uncertainty, having a structured plan that provides a clear overview and basic strategy will keep you grounded and focused on your vision. Business rarely goes exactly as planned, so make sure to build flexibility and contingencies when developing your business plan. The below template is a great place to start.
