10 Qualities of a Good Business Plan Explained
According to the United States Small Business Administration, there are approximately 32.5 million small businesses at the moment. The number fluctuates from year to year with businesses coming and going. If you want to remain profitable and thrive, you must have a plan to move forward.
A business plan does far more than help secure venture capital when you’re starting out. You’ll use a strong business plan throughout the life of a company. Use it to refocus your goals, refresh your memory on growth plans, and fulfill marketing goals. Share your plan with employees, shareholders, and investors, and refer back to it to see if you need to make adjustments along the way.
Having a solid business plan can help you successfully start, manage, and grow your business. But what are the qualities that make a business plan more than a document? What does it take to write a strong business plan?
What are the characteristics of a great business plan?
An excellent plan works for your company and keeps everyone on the same page. There isn’t a lot of ambiguity in it, and all things are listed in an orderly fashion that’s easy to absorb.
The format of the business plan may be almost as important as the words within it, so use bullet points, headers, bold print, and other tricks to keep the reader engaged.
Whether you already have a business plan written and want to edit it to perfection or you need to start from scratch , there are six characteristics every strong plan has.
1. Clear language
It might be tempting to throw in a bunch of industry jargon to show your knowledge of your niche. Unfortunately, most lenders won’t know what you mean. It’s much better to stick to language anyone can understand. You never know who you’ll need to share your business plan with.
Read over the plan several times for typos and clarity. Read out loud so you can “hear” the words. You’ll catch awkward phrasing by speaking the words. You can never have too many eyes on the plan. One person might catch a particular spelling error while another sees the grammatical errors.
Get feedback from your employees, family, mentor, and friends. You don’t have to follow every suggestion, but you should consider what everyone says and choose the things that make the most sense for your business model.
Look at the business plan through the eyes of someone outside the industry. Does everything make sense? Are there any phrases someone might have to stop and look up? You don’t want the reader to be thrown out of the flow of the text.
2. Employee recognition
Your business plan should include a layout for employee recognition. Developing a strong workplace culture benefits your brand in numerous ways, such as creating staff loyalty and retaining your best people. It’s difficult for a company to thrive and grow without focusing on its workers.
When employees receive recognition for their accomplishments, they are 82% happier in their jobs . They’ll outperform workers in a company without the plan for an excellent culture. If you aren’t quite sure what your company culture should be yet, just make some notes on the things you’ve loved about your favorite places to work.
3. Realistic goals
While you might love to run a multi-billion-dollar conglomerate, most small businesses stay relatively small. That isn’t to say you can’t find great success as a small business owner, but make sure your goals are achievable .
As you work through the potential revenue numbers, pay attention to what others in your industry make in a year. You might be able to exceed that by 10%, but thinking you’ll make four times what your nearest competitor does may not be very realistic.
Making your goals too lofty may hurt your chances of securing financing, too. Those considering investing in your business may feel you don’t fully understand the typical earnings of your industry.
4. Great mission statement
The best business plans outline the purpose of your company. Why did you start the business in the first place, and how will you leave your mark with the brand?
For example, a small landscaping company called Massey Services shares its mission statement on its website. Their overall goal is total customer satisfaction . Everything else in their statement on their webpage ties into that philosophy. They also want to build long-term relationships, they want people to trust them, and they value truth and integrity.
When you have a strong mission statement , it drives everything else you do. If your focus is on building relationships, you’ll develop a company culture based on interactions with employees. Your mission statement might arguably be the thing about your company that never changes.
5. Methodology for results
Make sure your business plan has a way to track results over time. Lay out the methodology of any facts and figures used to estimate revenue or what your costs will be. Then, check against those assumptions from time to time to make sure you’re hitting the right beats.
For example, if you plan to hit a certain level of revenue by the end of the first year, how can you break that down into quarters, months, and weeks? What is the best way to make sure you achieve your goals?
You can’t fix mistakes or make adjustments if you don’t know where you are in the journey. Pay attention to how quickly the brand moves toward objectives and make adjustments as needed.
6. Foundation for marketing strategies
How do you plan to get the word out about your brand? You must have a marketing strategy that makes sense for your budget and your philosophies as a brand. Perhaps you plan to work exclusively with online influencers. How much will you allocate to the budget for influencer marketing?
Take time to study who your target audience is and create buyer personas representing the average person who’ll buy from you. While you might need to tweak your personas from time to time, a solid plan, in the beginning, gets things off on the right foot and helps you bring in new customers.
Figure out how much you’ll spend online and offline on marketing efforts. Where can you reach your average customer? Do they mainly hang out on Facebook? If so, much of your budget can go to Facebook ads. On the other hand, if they use TikTok and rarely visit Facebook, you might want to put more time, energy, and finances into building an audience on the newer platform.
7. It fits the need of your business
The best business plan for your company takes into account why you need a business plan in the first place. Are you going for funding, using the information to improve internal operations, pitching your concept to investors, or perhaps communicating your goals to employees?
There are many different reasons you’ll utilize a business plan. They aren’t one-size-fits-all . You may even find you need addendums or additional plans to match the needs of your business at any given time.
If you intend to use your plan in-house to motivate employees or stick to your goals, a one-page plan may be all you need. You can also use a shorter version to test ideas you have and see how they might match the goals of your company.
On the other hand, a traditional full-length plan works best if you need funding from a bank or want to pitch a concept to an outside investor. You can also use a longer plan to get feedback from a mentor or business coach.
8. Your strategy is realistic
In a recent Gartner Execution Gap Survey, approximately 40% of leaders said their enterprise accountability and leadership were not aligned on an execution strategy. If your business plan doesn’t lay out how the business operates, there may be too much room for interpretation that causes dissent within the company and makes people work against one another instead of as a cohesive unit.
Start by ensuring different operational milestones within your plan are attainable. For example, if you share a financial forecast, is it realistic? Based on current revenue, can you realistically achieve your goals? If you’ve brought in $200,000 per year in revenue for the last few years, don’t expect to jump to $400,000 in the next quarter. Make a plan for increasing revenue – but in increments that make sense and are achievable.
You don’t need an unrealistic plan. Company leaders and employees will only grow frustrated and discouraged if they’re unable to hit any target goals laid out in the plan.
9. Clearly identifies assumptions
When you’re writing out a business plan, you may not have all the answers. At best, some of the information is an assumption based on outside data, past performance, and any testing you’ve completed. There will be times when you make a mistake in your estimates.
Be upfront about what your assumptions are when writing out your plan. Did you assume the company will increase 10% in productivity this year because it did in the last few years? Share your thoughts on why you think this is achievable based on past factors, but also make it clear it’s a guess. In reality, the company may over-or-underperform on those expectations.
Show what is an assumption also point to what might need to be updated or refined after a few months. Consider these areas to revisit frequently for updates or to set new goals.
10. Easy to communicate with the right people
Who is your audience? Knowing who will look at your business plans allows you to create it in a format you can share with the right people. Consider factors such as how easily scannable the text is and what it looks like in different formats, such as a document or PDF file.
Who are you sharing it with, and how will they use it? For example, if you include any links, will the person be able to click on them and go directly to the page you want them to go to? Is the viewer likely to read the plan on a mobile device? How well does the format adapt?
Consider who you’re sharing it with and how they’ll need to use it to make sure you offer it in the best format for viewing by that individual. You may even want to save your business plan in a variety of different formats.
Keep your plan updated
Your business plan isn’t something you write once and then forget. To truly make yours work for your business model, you must refer back to it and see where you are with your predictions and goals. As you hit high notes, add new objectives and plan them out with measurable goals.
Over time, your business plan won’t look much like the one you used the day you opened your company’s doors. However, the mission statement will likely stay the same, and elements such as company culture won’t change much.
What will change is your knowledge of the industry and how well you can adapt to the challenges faced by all small business owners. With a plan for handling different situations, you’re certain to be one of the small businesses finding success past the 10-year mark.
Eleanor Hecks
Eleanor Hecks is editor-in-chief at Designerly Magazine . She was the creative director at a prominent digital marketing agency prior to becoming a full-time freelance designer. Eleanor lives in Philadelphia with her husband and pup, Bear.
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Top 10 characteristics of an effective business plan.
If you're starting a new business, chances are you've already got a good idea of what you want your company to be. You know how it will make money and how you want to grow it. But there's one thing that can make or break your company before it even takes off: the business plan.
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Characteristics Of An Effective Business Plan
When writing a business plan, you need help knowing where to start. After all, many aspects of running a business need to be covered! But there are ten characteristics that every effective business plan should have.
1. It's Comprehensive
An effective business plan should be comprehensive without being overwhelming. A comprehensive business plan will cover everything from who you are and what you offer to how you measure success and achieve it. It should also include a detailed list of the risks associated with your venture and how you will mitigate those risks.
To be successful in your business, you have to have all the information about your product or service and what makes it unique so that when someone asks about it, you can give them a concise answer without having to pause for thought or research their part.
2. It's Detailed
In addition, a detailed plan helps clarify what resources you need to make your business successful. When working on an outline or draft, it can be hard to know what information is relevant and what isn't.
3. It Has A Strong Executive Summary
The goal of an executive summary is to convince your audience that you're qualified and capable of achieving the goals laid out in your business plan. You want them to understand why they should stick around and read more.
4. It's Easy To Read
If your business plan is too short on details, it can give off a "shady" vibe, and investors will avoid investing with you. On the other hand, if your business plan contains too much information, it may overwhelm potential investors and scare them away.
5. It's A Good Fit For The Company's Needs
6. it's visually appealing.
Regarding business plans, visuals can make or break your pitch. If you take the time to create a comprehensive and well-thought-out plan, don't you want it to be appealing?
Your business plan should be easy on the eyes with classic formatting, simple fonts, and a clean layout. If you're using Word or Google Docs, consider using a template that shows this format in its best light. If you're trying to impress investors or lenders, try hiring a designer to help with your presentation. It makes all the difference!
7. It Includes An Action Plan With Milestones And Metrics
8. it's flexible.
When you're writing your business plan, it's important to remember that things change. You won't be able to predict everything that will happen to your business, and you'll need to be flexible enough to keep up with the unexpected.
9. It Considers Current Trends In The Industry
10. it sets smart goals (specific, measurable, achievable/actionable, realistic/relevant, and time-bound).
Smart goals are specific. They are clear and concise, so everyone on your team knows what goals they are working to reach.
Why Is An Effective Business Plan Essential?
1. business plan helps you to focus on what you're trying to achieve.
A business plan helps you do this by setting out what your company will do, how it will do it, and why it's essential. It also enables you to prioritize. You can look at your overall vision for the company and decide if certain parts of your plan are more important than others at any given time.
2. Business Plan Helps You To Identify Your Goals And Priorities.
3. business plan helps you to identify strengths, weaknesses, opportunities, and threats, 4. business plan helps you ensure you have the resources needed for success., 5. business plan helps you to make decisions based on data rather than guesswork or intuition alone, 6. business plan allows you to make informed decisions confidently, 7. it gives investors a clear understanding of what they are investing in, what happens when a business doesn't have an effective business plan , 1. a business without an effective business plan will not be able to grow as fast as it wants to, 2. a business without an effective business plan will struggle to attract investors and customers, 3. a business without an effective business plan will not be able to compete with other companies in its industry, 4. a business without an effective business plan will struggle to get the attention of potential employees, 5. a business without an effective business plan will struggle to set realistic goals for itself, 6. a business without an effective business plan will have difficulty staying focused on its core competencies as a company, frequently asked questions- effective business plan, what are some common mistakes people make when creating a business plan, how often should i update my business plan, where can i get help creating a business plan for my business, top 10 characteristics of an effective business plan - conclusion.
Top 10 Characteristics Of An Effective Business Plan - Recommended Reading
Benjamin wann.com, benjaminwann.com blog.
Characteristics of a Good Business Plan
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"To start your journey in having your own business, whether in Brazil or in the United States, it is essential that you have a clear view of the market conditions in which you will be established in order to make objective decisions, calculate risks and have success. The business plan is the first step in this journey. It is the instrument that will allow your plans to become clear and concrete actions."
Every entrepreneur needs a way to organize and present information explaining how he plans to establish, grow and manage his business. The business plan is the perfect tool for this. When well built, such a plan catches the attention of investors and other stakeholders, encouraging them to support the project. And although potential customers and suppliers will likely never see that plan, it will have a great impact on how they perceive the company. When viewed in this way, a business plan becomes the foundation of any successful business.
Here are 7 essential characteristics for that foundation:
Abrams*, outlines how to make a business plan both solid and attractive:
1. The written document must make a good first visual impression;
2. The executive summary, the financial statements and the description of the management team must inspire sufficient confidence in the reader, to the point that it makes him want to invest in the enterprise;
3. The plan must contain a minimum of 15 and a maximum of 35 pages; on average, 20 pages are sufficient; it should cover a period of about five years, containing monthly statements for the first two years and semi-annual or annual for the following years;
4. Subjective observations should be avoided. Examples: "We believe ...", "We hope ..."
5. Always use well-recognized business and financial terminology. Examples: Market Share, Break-even Point, etc;
6. Always use numbers expressed in graphical form (citing references); for each data type, there’s an ideal format:
- Bar graphs - work well for making comparisons;
- Line graphs - are useful for demonstrating trends and making comparisons;
- Pie charts - ideal for indicating market share, sales, etc;
- Flowcharts - serve to represent processes, standards and organization charts.
7. The document must be visually appealing, that is, be sure that the font is adequate, that the layout is not confusing to the reader, and that the document is professionally bound, for example.
Preparing the business plan will help you to evaluate whether your idea is viable. You might decide to seek more detailed information about your industry, the products and services you will offer, your potential customers, competitors, suppliers and, perhaps most importantly, about the strengths and weaknesses of your business. In addition, it will serve as a support to obtain financing, new partners and investors, or to establish partnerships with suppliers and customers. However, the main user of your plan is you .
*All the planning strategies mentioned in this article were taken from the “Entrepreneurship Guide - Opportunities in the North American Southeast” offered by the BACC -SE Brazilian-American Chamber Commerce of Southeast in an article titled “Capacitação e Preparação para Iniciar o Empreendimento.”
*This guide is offered in Portuguese. If you’d like further information, but don’t speak Portuguese, please contact us at the BACC; we’re glad to assist!
*ABRAMS, Rhonda M.Business plan: Segredos e estratégias para o sucesso, 1994.
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Ten Characteristics of an Effective Business Plan
1. Planning for business should be a process not an event. Even if it is designed to produce a tangible output like a business plan to be studied by potential investors, it is the process of planning which will ensure focus, commitment and understanding, not the plan itself.
2. The process should be continuous, frequently reviewed and updated. A "once a year" formal meeting is likely to produce significant omissions, constrain creativity and invite people to switch-off from strategic and tactical thinking for the rest of the year.
3. It should directly involve everyone accountable for implementing the business plan. It should also involve, whether directly or indirectly, everyone in the organisation at some stage. The purpose of involvement is to secure deep understanding and commitment.
4. Business planning should be led but not constrained by strategy. Objectives and action plans are extremely difficult to set without an idea of their purpose and focus.
5. To ensure communication is simple and action effective, business planning should define a few, harmonised priorities.
6. When planning for business, organisations should have a good understanding of:
- Clients, their current and anticipated needs and behaviour; how these may change << click for more >>
- The market within which the organisation operates and how it is likely to develop in the future
- Competitive forces and how they are likely to evolve in the medium to long term
- Macro factors affecting the organisation and their likely impact << click for more >>
7. It should attempt to balance this analysis of the external environment with a clear understanding of its internal resources and competences << click for more >>
8. The organisation’s strategic purpose and intent should derive from decisions about how best to manage its resources and competences in order to prosper in the environment in which it operates
9. The process should seek to capture what the organisation has learned from its past, from its competitors, suppliers and customers, and from its own people
10. Finally, planning and review should be lock-stepped together. This means defining plans in terms that are measurable, but also ensuring that frequent reviews examine progress, as well as the effectiveness of the plans themselves.
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Top 5 Characteristics of a Successful Business Plan
“No, no, no. It’s cross the I’s and dot the T’s… duh!”
Before you can get around to investing your money, hiring a staff or making a product, you need a business plan. Without a business plan it is difficult to achieve consistent, long-term success. The business plan is an outline of how the product will be created and marketed, how funds will be raised and who will buy the product.
The more detailed your business plan the better. It should look at all aspects of the business and plan for every step. One of the most important parts of the business plan is the executive summary. The executive summary is a short narrative summarizing the value of your business idea.
It helps investors or financial institutions to quickly understand the business you propose to start. It is important it be written in a way to get investors excited about the business and want to read your business plan.
The 5 Key Elements
There are 5 key elements that must be included in an effective business plan.
- Clear description of product or service
- Market & competition information
- Your unique selling proposition (USP)
- Technology and strategies required
- Listing of feedback obtained throughout your process
It should provide a clear description of the product or service and contain an in-depth look at the market you plan to enter and your primary competitors. This should also show what makes your product or service unique and will make customers choose you and not your competitors.
Any technology to be employed should also be clearly described along with the resources you will need for production and marketing. The fifth element of the business plan is a listing of some of the feedback your executive summary has generated.
The business plan itself should contain an in-depth description and analysis of the market you propose to serve. It should include as much demographic information as possible. This will help you to better understand what your company needs to do to attract and serve them and properly position your company in the marketplace.
Part of your plan has to be ways in which you anticipate your company will grow. It should include how you think your competition will react to your entrance into the market and how you will counteract it. The business plan should also include information on any intellectual property you have in the works.
Pricing is very important
Fat stacks and all that – keep the money in mind and maybe in hand.
In order to come up with a price that ensure you a good profit you have to know what it will cost to create the product. You must also show why you think your product is economically viable. Do an assessment of your company and identify any competitive advantages you may have.
Show if you are a company which will create a series of products and services or your focus is one major product which you feel will make you a success. It is also crucial for you to assess the size or the market and how much of it you can capture and control. List any trends or technologies which could negatively affect your company’s development and growth.
List the required resources to make your vision a reality, too ( like I did here ). This should include the members of your proposed management team and any other key hires you plan to make along with all technology or equipment you will use. You should also state the amount of capital you will need and a financial plan to show how you will use it. Point out your potential revenue streams.
You also have to include a profit and loss statement, a balance sheet and a cash flow plan that covers the first 12 months, 12 quarters and one for each of the first three years. It should show when you anticipate beginning to make a profit. You must also identify your sources of funding so don’t close out that file before you have this covered.
Get Your Plan in Order
The 5 main characteristics of a business plan you need to consider are to include clear information about your product or service, the market and competition, why you’re special, what technology you are to use, and what feedback you’ve received and used through your growing phases. Sure, there’s going to be a lot more to a winning business plan that brings in round after round of funding, but make sure you cover these basics first. You can work on tweaking it for ultimate success later.
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What Are The Characteristics Of a Good Business Plan?
In this article we are going to talk about the what are the characteristics of a good business plan. A BUSINESS PLAN IS A DETAILED DESCRIPTION OF THE GOALS, VISIONS AND FUNCTIONALITY OF A BUSINESS. It answers all the questions like what, where, who, why and how related to the company or business we are talking about. It presents the ideals and principles of the business. It is the plan that a business owner shows to its investors or customers and related people to increase their interest in the business and make them to invest in it.
But before we start making a business plan it is important for us to know what all needs to be kept in mind so that your business plan is a good one. There are various do’s and don’ts , how’s and what’s so without further adieu let’s get started.
What are the characteristics of a good business plan?
A few impactful characteristics of a good business plan are mentioned below:
Here, we are going to do a descriptive analysis of what all is necessary to include in your business plan to make it effective and efficient.
1. It should be brief and easy to understand
The business plan that you are making is going to cater to a large number of audience with different mindsets, temperament, level of understanding and knowledge. And so, it is very important to make your business plan easy to understand and brief so that even an amateur can understand what are you trying to say through the plan and also does not get bored or zoned out. You should only give the details necessary and talk about them in brief. It keeps people’s interest and participation active.
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2. It should be descriptive and clear in its purpose
A business plan should make the objectives and the purpose of the company very clear to the audience. It should talk about what the company has to offer, how can it be beneficial for investors and customers, and what all benefit it has. The reason for the establishment of the company and the goal it works towards everyday must be mentioned in the business plan clearly and boldly to help the customers understand the basics of the company they are going to work with.
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3. It should be supported by relevant data and documentation
Adding proofs along with your contextual data can improve the people’s faith in your company and it’s objectives. It is essential for you to show your company’s growth and progress charts and figure to make people realize the true potential of the company. Proper data and documentation helps people who are your targeted audience to know more about the company, it’s market presence and it’s yearly turnover. To establish the company’s image in the eyes of the audience it is also equally important to show them the data of the company’s CSR work that is – Corporate Social Responsibility. It shows how the company is not only centered towards it’s goal but also works for the welfare of the society.
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4. It should include company’s vision along with its requirements
One of the major reasons as to why a business plan is created and presented to the audience is to make the them aware of the company’s financial plan for the next four to five years. It talks about company’s vision on how to increase it’s sales and productivity and the new strategies it is going to follow and inculcate in the coming years. It also mentions the equipments , technologies, raw materials, financial or other resources that the company might be needing to fulfil their professional commitments.
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5. It should be realistic
One another measure of weather or not a business plan is good is it realism. A plan that is only in the paper and does not seem to be real enough to be actually put into works is something that the audience will not approve of. Even the greatest plan that cannot be implemented because of whatever genuine reasons is also considered to be a bad plan. A plan that has flaws and loopholes in it cannot work for the benefit of the company. The company should make such plan that does not have any flaws and even if there are possibilities of things going wrong the company should analyze it and have it’s counter attack measures ready.
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6. It should talk about good and services of the company
The business plan must include in-depth information of the goods and services that the company has to offer. It should include reasons and qualities as to why the goods and services of your company is unique and better than what is available in the market. A plan should be convincing enough for it’s audience that they choose this company over others. It can also include facts and figures to make the Information more believable and easy to understand.
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7. It should have an error less format
Another important thing that needs to be kept in mind while making a good business plan presentation is to use formal format, styles and formal language only. The business plan is an overall presentation of your company and it’s image and so it is also important for it to be error free. For this you can use auto correct or spelling and grammar check again and again and do the proof reading to ensure that there is no mistake in the plan. You can even make your colleagues to go through the plan and ask them for their reviews and suggestions.
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8. It should be motivating for the audience
Another important factor that is a must in your plan presentation is the customer strategy followed by the company. The customer strategy includes the strategies and action plans made by the company to create and maintain it’s customers. The plan should focus majorly on serving it’s customers. In this way, the Audience who will see the plan will get motivated to be associated with a company who’s top priority is their customers and meeting their demands.
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9. It should talk about it’s competition
Amongst the various aspects of a business plan , one important aspect is the company’s competitors. A good business plan should include data and documentation to show it’s competitors in the market and the relation between them. It should include genuine information to show their own share in the market. The plan should reflect upon the target market players of the company and how it is better than others. It should give reasons and data supporting it’s statement of why and how it is better than it’s competitors. The plan can also talk about how the company plans to make it’s strategies in order to get better and better at the market and serve it’s customers.
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10. Review and revise the plan
At the end , the only thing to remember is the frequent revision and review of the business plan to check for any loopholes or changes in the market plan. This is done to correct any flaws and make changes in your active strategies to keep up with the ever growing and developing market. A good business plan is the one that is open to changes in plans and management along with correction with time. It has to be flexible in it’s terms so that it can adjust and be ahead of others in the market.
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Using the above mentioned tips and tricks you can easily make an impactful business plan presentation and impress your clients. So, there you go!
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Of course, having a great product is the first step. but you won’t get anywhere if you don’t work on this..
M any early-stage entrepreneurs have no idea what is a business plan until someone asks them for it. Yet, businesses who create a business plan are 20% more likely to succeed than their counterparts who don’t. We’ve also found that creating a business plan makes you more confident when presenting your project.
While working on it, you’ll have to take a harsh look at every aspect of your business. As a result, you’ll be able to answer people’s questions quickly because you’ve already asked yourself these questions. So why are people so reluctant to take the time to write theirs?
Early on in the development of your business, it’s really easy to just focus on creating your product or service and think that the rest will figure itself out. Sadly, this leads to issues that could have been easily avoided if they had been dealt with earlier on.
“By failing to prepare, you are preparing to fail.” ― Benjamin Franklin
While there are a variety of opinions about how to build a business plan, I’ve found that there are four important characteristics every business plan should have.
1. Specific
When creating your business plan, you need to be specific. Many times, you’ll have to think about what your business will look like in several years. It’s crucial that you make all your information as precise as you can. This includes setting deadlines for your goals. Procrastination is human, and you’re much more likely to take actions if you’ve set a strict date for yourself and others to see.
It also makes it easier to know if you’re meeting your goals once you’ve set specific Key Performance Results (KPIs). The same goes for identifying your customer base: it pays off to be specific when trying to figure out to whom you’re selling. Just saying that you’re targetting “women” or “teenagers” won’t help you; what’s useful is knowing what women between the age of 25–40 or teenagers who love video games want in a product. Once you know this, you’ll be able to identify how to best sell them your product.
2. Realistic
This is of the utmost importance. You have to be 100% realistic and honest when working on your business plan. If you’re not entirely convinced that you can increase your sales by 50% in the next 6 months, DON’T tell your investors/banker/partner/employees that you’ll reach that goal.
It’s very tempting to toot your own horn and give the best-case scenario for everything, but it’ll only hurt you in the end. You’re better off saying you can increase your sales by 20%, and surpassing yourself than missing a target you set too high. This is the same when comparing yourself to competitors and measuring how you stack up. There’s just no point in lying or stretching the truth in your business plan: sooner or later the truth will come out.
3. Flexible
So you’ve worked hard on drafting a business plan that was both specific and realistic. Great. Now you have to make it flexible: your business plan is a “living” document that should evolve along with your business.
A certain portion of your plan is educated guess-work. As you realize that your assumptions are right or wrong, you should be able to adjust your plan if needed. If you see that the business model you’re defined isn’t working as well as you thought, don’t get stuck on that one just because you said so in your business plan.
You should be able to test another business model when needed — just update your business plan accordingly. In business, flexibility is key. There’s no shame in admitting that you’re wrong or that you made a mistake, as long as you’re willing to work and find a new solution to fix it.
Creating a business plan can be tough, but you don’t have to do it alone. At Bridge for Billions, we’ve helped over 750 entrepreneurs crafting their own validated business plan — thanks to a top-notch methodology .
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Paula Abarca
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What Are The Characteristics Of A Business Plan?
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Introduction
Today, we are going to talk about the characteristics of a business process and the characteristics of business presentation. A business plan is a thorough description of the vision, objectives and operation of a business. All you need to know about the good characteristics of the business are discussed below.
Descriptive And Clear In Its Purpose
It is one of the most important characteristics of business plan. A plan must make the purpose and objectives of the organization very clean to the customers. It must elaborate on what the organization has to deliver, how the plan can be advantageous for the audience and investors and what is the complete advantage it has. The purpose for the formation of the organization and the objective it operates towards all day should be clearly and boldly mentioned in the plan of business to assist the audience in understanding the fundamentals of the organization they are thinking to operate with.
It Should Be Detailed And Simple To Understand
It is also one of the most important characteristics of business plan. The plan of business that you are forming is proceeding to serve a huge number of customers with unlike temperament, knowledge, level of understanding and mindsets. So, it is very crucial to form your plan of business brief and easy to understand so that a non-professional can be able to know what you are conveying via plan and also doesn’t get zoned out or bored. You must only provide the information that is essential and talk about them in detail. It makes customers’ and investors’ participation and interest active. It is one of the useful characteristics of a business process for business owners.
Describing The Company’s Vision Along With Its Needs
It is also one of the most important characteristics of business plan. The primary reason for making a business plan and delivering to the customers is to be aware of the organization’s economical plan for the upcoming 4 to 5 years. It describes an organization’s inventiveness on how to enhance its productivity and sales and the new tactics it is proceeding to adopt and implant in the upcoming years. It mentions the raw materials, equipment, technologies, and economical resources that the organization may be required to attain their executive commitments. It is also one of the useful characteristics of a business process for business owners.
Describing Good And Services Of The Company
It is one of the most important characteristics of business plan. The plan should describe comprehended information of the services and goods that are organization has to provide. It must involve qualities and reasons as to why the services and gods of your organization are different and finer than what is in the market. A business plan must be impressive enough for its customer that they select this organization only. It can also provide figures and facts to produce more believable and understandable information.
By following the given characteristics of business presentation, you can expand your business. All you need to do is make a solid and brief business plan for your customers and investors.
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Business Plan
A summary document that outlines how and why a new business is being created
What is a Business Plan?
A business plan is a summary document that outlines how and why a new business is being created. New entrepreneurial ventures must prepare formal written documents to outline their long-term objectives and the means to be employed to reach said objectives. The business plan underlines the strategies that need to be adopted in order to reach organizational goals, identify potential problems, and devise custom solutions for them.
In addition, potential investors look at business plans to evaluate the risk exposure of a particular entrepreneurial venture. Startups that try to attract employees and investors use business plans to solidify their claims regarding the potential profitability of a particular business idea. Existing companies may use business plans to deal with suppliers or manage themselves more effectively.
- A business plan is a summary document that outlines how and why a new business is being created.
- New entrepreneurial ventures must prepare formal written documents to outline their long-term objectives and the means to be employed to reach said objectives.
- Existing companies may use business plans to deal with suppliers or manage themselves more effectively.
Why Use a Business Plan?
Owing to the following benefits of a well-researched and comprehensive business plan, preparing one is highly recommended, but not a mandate.
1. Feasibility
Entrepreneurs use a business plan to understand the feasibility of a particular idea. It is important to contextualize the worth of the proposed product or service in the current market before committing resources such as time and money. It helps to expand the otherwise limited view of a passionate innovator-turned-entrepreneur.
2. Focusing device
Formulating a concrete plan of action enables an organized manner of conducting business and reduces the possibility of losses due to uncalculated risks. Business plans act as reference tools for management and employees as they solidify the flow of communication, authority, and task allocation.
3. Foresight
The process of preparing a business plan often creates many unintended yet desired results. It functions on the principle of foresight as it helps one realize future hurdles and challenges that aren’t explicit. It also brings a variety of perspectives on the forefront, eventually leading to a more comprehensive future plan of action.
4. Raising capital
A business plan is an effective way of communicating with potential investors, and the level of expertise and time used in preparing a business plan also gives professional credibility to entrepreneurs . It analyzes and predicts the chances of success for the investor and helps to raise capital.
Features of a Good Business Plan
1. executive summary.
The executive summary functions as a reading guide, as it highlights the key aspects of the plan and gives structure to the document. It must describe ownership and history of formation. It is an abstract of the entire plan, describes the mission statement of the organization, and presents an optimistic view about the product/service/concept.
2. Business Description
This section presents the mission and vision of an organization. Business descriptions provide the concept of one’s place in the market and its benefits to future customers. It must include key milestones, tasks, and assumptions, popularly known as MAT. Big ideas are redundant without specifics that can be tracked. Fundamental questions to be answered include:
- Who are you?
- What is the product or service, and what are its differentiating characteristics?
- Where is the opportunity located?
- When will you start implementing your plan and expects cash flows or profits?
- Why should customers choose your company?
- How do you plan to run the business in terms of structure and regulatory compliance?
3. Market Strategies
The market strategies section presents the target consumer group and the strategies needed to tap into it. It requires meticulous analysis of all aspects of the market, such as demography, cultural norms, environmental standards, resource availability, prices, distribution channels , etc.
4. Competitive Analysis
The competitive analysis section aims to understand the entry barriers one could face due to other companies in the same or complementary sectors. The strengths of existing companies could be co-opted into one’s strategy, and the weaknesses of existing product development cycles could be exploited to gain a distinct advantage.
5. Design and Development Plan
It outlines the technical details of the product and its development cycle within the realm of production. In the sphere of circulation, it focuses on marketing and the overall budget required to reach organizational objectives.
6. Operations and Management Plan
The operations and management plan describes the cycle of business functions needed for survival and growth. It includes management functions such as task division, hierarchy, employee recruitment, and operational functions such as the logistics of the value chain , distribution, and other capital and expense requirements. The managers’ backgrounds must also be briefly included.
7. Financial Factors
The financials section should include the company’s balance sheet and cash flow projections. Financial data is imperative to provide credibility to any assertions or claims made about the future profitability of the business. The aim is to provide an accurate idea of the company’s value and ability to bear operational costs and earn profits.
Common Mistakes to Avoid While Writing a Business Plan
- The plan must not begin by stressing the superiority of one’s product or service, but instead by identifying a genuine problem faced by the consumer. The plan should then be presented as a way of bridging that gap between consumer expectations and industry offerings.
- A team’s expertise is displayed not by listing their academic achievements and employment history, but by stressing how the team’s experience is best suited for a particular industry sector or product. Often, teams with members who have failed in a past venture are successful in attracting capital.
- The most common mistake is to offer an excessively optimistic view of the opportunity. There is no market without competition and no venture without some degree of risk, and a business plan must portray the objective truth with sincerity.
Additional Resources
CFI is the official provider of the Financial Modeling and Valuation Analyst (FMVA)™ certification program, designed to transform anyone into a world-class financial analyst.
In order to help you become a world-class financial analyst and advance your career to your fullest potential, these additional CFI resources will be very helpful:
- 5 P’s of Marketing
- Business Model Canvas Template
- Profit Model
- Value Proposition
- See all commercial lending resources
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COMMENTS
What are the characteristics of a great business plan? · 1. Clear language · 2. Employee recognition · 3. Realistic goals · 4. Great mission
It helps you organize your ideas, communicate them clearly to others, and get buy-in from investors or lenders. A good business plan can also
Characteristics of a Good Business Plan · 1. The written document must make a good first visual impression; · 2. The executive summary, the
Ten Characteristics of an Effective Business Plan · 1. Planning for business should be a process not an event. · 2. The process should be continuous, frequently
Clear description of product or service · Market & competition information · Your unique selling proposition (USP) · Technology and strategies
What are the characteristics of a good business plan? · 1. It should be brief and easy to understand · 2. It should be descriptive and clear in
This is of the utmost importance. You have to be 100% realistic and honest when working on your business plan. If you're not entirely convinced that you can
Introduction · Descriptive And Clear In Its Purpose · It Should Be Detailed And Simple To Understand · Describing The Company's Vision Along With
Features of a Good Business Plan · 1. Executive Summary · 2. Business Description · 3. Market Strategies · 4. Competitive Analysis · 5. Design and
1. A Well Conceived Plan. Good businesses need good plans. · 2. Strong and Positive Leadership · 3. Stay Focused on Strengths · 4. Willing to Take Risks · 5.