It may be tempting to dive right in when you have a great startup idea, but failing to create a detailed business plan is where many entrepreneurs go wrong.
A solid business plan can be the difference between just an idea and a successful business. It allows you to set goals and determine how to realistically measure them. In the process of creating one, you develop an understanding of your market and the competition that is based on facts, not just hopes.
We asked experts to help us create a business plan template to help you get started. Here are 10 unexpected items every business plan should have.
A review of the competition
If companies focus only on themselves in their business plan, they are making a big mistake. Businesses should use their business plan partly to address the competition and how their idea differs from what’s already out there.
“First, identify your X factor — what can you do 10 times better than your competition?” Martorelli said. “Next, test your hypothesis by talking to potential customers. Do they value what you are proposing to offer them as much as you think they do? Finding the answer to these two questions is the most important planning anyone can do.”
Companies that value innovation must make it a priority from the start. Your business plan should highlight the ways in which your startup will be original and groundbreaking, said Amy Hutchens, business strategist and CEO of AmyK International, which specializes in executive development.
“Innovation must be a critical component of every business plan,” Hutchens said. “By making innovation part of the plan, the process becomes intentional, not reactive or accidental, and sets the stage for a culture of creativity and innovation for the long run.”
A contingency plan
It is highly unlikely that everything about your business will go according to plan. Justin Palmer, founder and president of HomeLife Media, which operates pet-focused websites, said entrepreneurs should have a “contingency plan” that allows them to make any necessary business-model changes should something not go as anticipated.
Preparation for success
On the other hand, businesses also should prepare for unexpected success. Your business plan should account for normal scenarios as well as highly successful, best-case scenarios.
A typical business plan will discuss a company’s target market, usually in terms of demographic information such as age, gender and income level. However, businesses should consider looking even further to define their target customers by factors such as lifestyle, needs and desires
A social media strategy
As social media remains a dominant force in marketing and customer engagement, a business plan needs to highlight how the company will use social media to its strategic advantage
An exit plan
Although it may be the last thing on your mind when starting a business, providing an exit strategy with your business plan can be a great help if you decide to sell the business later on. A well-researched exit strategy can also help you land investors
A way to implement the plan
One of the key challenges for businesses is actually implementing their plan, “Often, by the time the planning process is over, the team is exhausted and burned out, and they have a tendency to just go back to doing things the way they’ve always done them.”
A commitment to follow the plan
Working out a detailed business plan won’t do much good if you and your employees don’t stick to it, so companies and employees should be committed to following the points included in a business plan