A strong, agile business plan can be the difference between success and failure. As we head into the New Year, every organization should take the time to review its current business plan, make adjustments, and reset its strategy for the future. The business communications component is a vital part of this plan, and integrating it into your plan can help your company.
What is a Business Plan?
An effective business plan provides a framework for running your business and a roadmap for the future. It helps you clarify your strategy and identify potential stumbling blocks that might prevent your success. A great business plan will lay out your objectives and goals and help identify what it takes to achieve them.
If you are looking for investors or a loan, a business plan will be essential to demonstrate to others that you have a strategy in place to meet your goals. A business plan helps you manage the business and stay on track. Even if you don’t need outside funding, a business will help you develop:
- Strategic plans
- Ideas and initiatives
- Research about your customers (and potential customers)
- Staffing and recruiting
How to Write a Business Plan
There are several approaches to writing a successful business plan. The Small Business Administration (SBA) says most choose either a traditional business plan or a lean startup format.
Traditional Business Plan
While you don’t have to stick to any particular format for your business plan, most have 9 key sections that help detail the strategy you plan to employ.
Executive Summary
A quick overview of what your company is about, what it plans to do, and why it will be successful. If you are looking for funding or requesting an investment from your ownership, you will also want to include some high-level financial information.
Description
The company description should focus on why you are in business and the problems your business solves. You will want to talk about the customers your company targets. You will also want to discuss any competitive advantage you have that drives your success.
Market Analysis
No matter how strong your business plan is, you can’t control what your competition does. And what your competition does will have an impact on your business. A good market analysis will help identify strengths, weaknesses, opportunities, and threats (SWOT) in you and your competitors. It should also include an estimate of the overall market potential and where your company fits into the mix.
Organization and Leadership
This area will discuss your business structure (including the legal structure) and key leadership positions within your organization. You may want to include an org chart or background on key members.
Products or Services
Describe the key products or services you offer, how they benefit your customers, and the product life cycle. You will want to discuss your supply chain and any expansion you plan in the year ahead.
Marketing and Sales
One of the key things in any successful business plan is the focus on marketing and sales. Laying out your strategy for attracting and retaining customers, how your sales team will meet financial goals, and your financial projections will be key.
Funding
If you are asking for funding, loans, or additional investments, you will want to detail what you want and how the funding will be used.
Projections
A business plan is a roadmap for what you plan to do. In this section, you will want to provide projections based on your plan. If you’re a new business, you will want to include a forecast of revenue and expenses. If you’re an ongoing business, you will likely want to include income statements, balance sheets, cash flow projections, and capital expenditures.
Appendix
The appendix can include any other relevant information or supporting documents.
Sample Traditional Business Plan
You can download a sample traditional business plan from the SBA website to get ideas about developing yours.
Lean Startup Business Plan
A lean business plan presents a more streamlined approach, focusing on your company’s value proposition, organization, customers, and financial outlook. Lean business plans typically include:
- Key partnerships, suppliers, and strategic alliances
- Key activities and competitive advantages
- Key resources you plan to use to achieve your goal
- Your unique value proposition
- Customer relationships and your plans to develop them
- Customer segments and target markets
- Communication channels to attract, onboard, and retain customers
- Cost structure for your business
- Revenue streams and projections
Sample Lean Startup Business Plan
You can download a sample lean startup business plan, courtesy of SBA.
A Deeper Dive into Financial Planning
A key part of your business plan — whether you’re starting a new venture or you are an ongoing concern — will be your financial planning and budgeting. Typically, this focuses on three specific areas:
- Improving Efficiency
- Reducing Expenses
- Increasing Revenue
No matter how big or small your business is, you have a finite amount of time and resources available. This requires an honest assessment of your budget to determine the best ways to spend your money.
Your business plan should include your planned weekly, monthly, and annual spending with a close look at how every line item contributes to your bottom line. You will also want to look at where to invest to improve operations and increase revenue.
Improving Efficiency and Reducing Expenses
As part of your efforts to develop a business plan, you need to evaluate workflow and areas where you can improve productivity and efficiency within your organization. Three places that deserve attention in the new year include your digital transformation efforts, cloud resources, and communications solutions.
Digital Transformation
While there is an upfront cost to digitizing and transforming operations, the long-term savings and increases in productivity can be enormous. A survey of organizations undergoing digital transformation revealed the top benefits, including:
- Improved operational efficiency
- Reducing product development costs
- Introducing new revenue streams
- Improvement in quality
- Better positioned to meet changing customer expectations
Cloud Resources
As companies have continued to move more business to the cloud, it’s created more flexibility and streamlined systems. In many cases, however, it’s also increased costs. Companies should analyze their cloud bills and check for ways to consolidate resources or enact practices that will save money.
Most companies underestimate the cost of using the public cloud. Gartner’s research shows that cloud bills are often two to three times higher than expected. 80% of the companies they surveyed exceeded their budget.
Contracts are typically open-ended. Rather than a fixed cost, such as an equipment purchase or lease, rates are based on usage and consumption. Without strict guidelines and protocols in place, costs can spiral quickly.
Enterprise Communication Solutions
Another area to look at is your business communication solution. Unified communications can streamline processes and providers, and tie together much of your tech stack to facilitate engagement, even among remote employees.
VoIP (Voice over Internet Protocol) can save companies a significant amount of money vs. traditional phone service from the local phone company. Modern technology lets you extend advanced calling features and collaboration tools to remote employees or a distributed workforce.
Simplicity VoIP can be a fast way to save money for small businesses while adding in calling features generally reserved for Fortune 500 companies at little to no cost.
Increasing Revenue
If you want to increase revenue, you need to be proactive. A big part of strategic budgeting is evaluating opportunities within your market to see where you can grow and where making a strategic investment can get the results you need.
This goes beyond just forecasting revenue to fund operations and ensure you’re hitting a specific margin. You want to identify opportunities for growth and do a careful analysis of what it takes to achieve those costs.
This might include things such as making investments in:
- Marketing tools and tactics
- Additional sales or marketing staff
- Training and coaching
- Product development
- Focused sales events (FSEs)
- New sales initiatives
Creating a Great Business Plan
A study by the University of Oregon and Bplans looked at companies that had business plans versus those that did not. They found that companies with formal business plans grew 30% faster and were twice as likely to grow their business compared to their competitors without plans.
While creating a great business plan for the new year will take time and effort, it provides a foundation for managing your business and can pave the way for a brighter future.
Simplicity VoIP provides VoIP, hosted PBX, business telephone, and communications tools to small, medium, and large businesses throughout the country for a unified communications solution. To learn more about how Simplicity VoIP can fit into your business plan, streamline your communications, and make them more cost effective, contact the experts at Simplicity VoIP today.
