The Guide to how to make a Business Plan for small and medium-sized businesses. A step by step guide to the drafting of your business project and to the direction of your business strategy.
The business plan is a very important tool for any business, so important that here we have created a comprehensive guide to its editorial called, but often many successful businesses are born and they grow up without ever setting one up. Does this mean that the business plan is useless?
Absolutely not! But a clarification is a must …
“Not all businesses need the same business plan style!”
A complete business plan (like the one described by our guide) is important for many companies and in many situations, but for many others a complete business plan in all its parts is excessive and can even turn out to be a huge waste of time and money.
Some companies need a “traditional” business plan, an essential tool for highly complex activities, tendentially companies trying to do something innovative and never done, in any field (to be understood also a hotel with a service proposal particularly out of fees could fall into this category, not just innovative start-ups), or activities that are seeking funding. This type of business plan so complete allows the entrepreneur to analyze risks, manage uncertainties and consider all the critical issues.
However, many small and medium-sized businesses need a simplified business plan. If the company in question operates in a traditional sector and does not need financing, there is a good chance that a “mini” business plan is only necessary. Classic examples of these companies are freelancers of all kinds, consultants, trainers, trades, artisans, lawyers and creative professionals, as well as the entire small business sector.
How to make a simplified business plan suitable for my business?
Even if in these times the unknowns are more and more, these companies operate in sectors and with products and services much simpler than the so-called innovative start-ups, because they turn to an existing market with a stable model. This allows you to ignore the many sections of the business plan that are usually designed to test the feasibility of a new business idea and, if you are not looking for financial help, you can also avoid the information usually needed by banks and investors.
The simplified business plan
Although “mini” the business plan is essential for two basic reasons …
- The process of developing the plan is a valuable tool that allows you to see the business idea through various lenses and key aspects for the success of the business.
- The plan provides a vision and a direction. Having well-defined steps helps you achieve your goals much faster.
How to make a simplified Business Plan? The 3 key elements (plus one!)
Marketing and Commercial Plan
The probably most important element in the growth of a small business is the ability to attract a steady and growing flow of ideal customers. The marketing plan should therefore accurately identify the ideal customer and articulate the differential values and advantages of the product or service in a clear and simple manner. Furthermore, it will be essential to plan continuous research activities for new customers.
No matter how good the business idea is and how good the marketing strategy is, nothing works without adequate financial support. The best choice is to start with a 12-month forecast of revenue and expenses, and possibly a cash flow forecast (the so-called cash flow) or the extent to which the business will be able to self-finance. Essentially it is about answering questions like: “How much money will I cash in next month?”, “When will I be able to afford to hire the next employee?”
The phase most neglected by companies is often that of the exit strategy, or the choices that will lead the entrepreneur to recover the invested capital maximizing the profit. Having a clear exit strategy allows us to build a path towards a well-defined goal from the first steps. A business plan must always have long-term objectives to be pursued, this allows to design the intermediate steps and the relative management of the route and any accidents. The exit strategy could consist in reselling the company at a given price, managing it to start a new one, opening new offices or branches, acquiring oneself, selling a patent, etc.
In business, action is at the heart of a good project. If you have a good idea for a company, choose the type of business plan you think you need, be sure to include and review the core components and features that are relevant to your industry and get to work.
If instead you are creating a business plan for an activity already started, a good advice can be to choose the aspect of the company to strengthen more urgently and create the plan around that, always working for priority and keeping the objectives in mind!