So let’s have a look at what ought to be in a good one-page business plan. I have spoken about business plans a number of times, and whilst every business is different, the themes are mostly the same.
1. Business “Why”
I like to get what the business is about set out succinctly and in plain English, and have it located in plain view at top left of the business plan. I’ve spoken about my own ‘Why’ perviously (read here). The literature often refers to this as “Mission” or “Vision” Statements but I like to reference Simon Sinek’s book “Start With Why” (if you haven’t read it, you should! I read my copy on a Kindle, you can buy a copy here for around $10). What we are looking for here is why does our business exist, an overarching statement of what it is that we are trying to achieve. This is not just for this year, or next year, but in globo what do we want our business to be. Development of a business “why” is beyond the scope of this article, but once we have worked it out (and it will likely take some effort to get it right) this statement of aspiration should become the basis of all of our planning. Some examples could be “To be the best [insert type of business] business in our local area” or better yet “To add value to all of our customers so that they feel compelled to recommend us to all of their friends and colleagues”, or it could be “To provide the best customer experience available”, or “To make beautiful things that are easy to use” (paraphrasing Apple Inc.). 2. Objectives
Here we detail what our longer term goals are for the planning period. A few bullet points will normally suffice. We need to apply S.M.A.R.T. principles here (Specific Measurable Assignable Realistic Time-related), again beyond the scope of this article, but you get the idea. Examples could be “Grow market share to 15 per cent in our local area by the end of the year”, or “Increase number of customer facing employees to 10 by the start of 2015”, , or “increase eBIT to 20 per cent by 30th June 2014”. For the purposes of example, I am going to use ”Achieve Sales of of $1,000,000 and Profit of $200,000 by 30 June 2014”
Here we get into the nitty gritty of what we plan to do. In order to achieve an improved EBIT for example we might have a strategy of increasing sales or reducing costs. We could say something like “Increase sales by developing strategic alliances with lending institutions in order to increase referrals” or “Write Articles for trade journals to increase visibility to our target market”. On the cost side we might say “Reduce overheads by 15% by 30th June 2014”. My strategy is to increase sales by $200,000 by the addition of (insert your number) new ideal clients.
4. Action Items
Time to convert what we say we are going to do into action. As far as is possible we probably will want to put numbers around our action plan. So to extend our examples from above we might measure something like “Number of Strategic Alliance Meetings” or “Number of Articles written” or “Compare providers to ensure best value for money in relation to our telephone expenditure” or “Achieve reduction in printing costs by investigating alternative suppliers”. Some action items will not have progress scores of course, they will either be done, or not done, like for example reviewing telephone providers, but at the least they will need to have a defined timeframe for completion.
In my own case I have set myself an objective of increasing client numbers, using a strategy of employing social media to increase awareness, utilising measurable actions of number of Tweets, LinkedIn updates, Facebook posts, Blog articles etc., so these are actions for which I want to set Specific targets which I can Measure, which are Assignable, which are Realistic and which have a Timeframe attached to them (S.M.A.R.T. eh?)
The key to action is of course to assign responsibility, set a definite time frame, and introduce accountability.
So how are we going to measure success? Profit and revenue targets are pretty easy to measure, market share less so. How to set success standards will vary from business to business, and will need to be tailored to the objectives we have set for ourselves.
We are definitely going to have some financial targets, and no business plan would be complete without them, but we need to separate wood from trees. In my business, I’m really only interested in revenue and profit. Most of my costs are pretty close to fixed, so ratio of wages to sales for example is not something over which I have any influence, so no point in looking at it. You might also have some goals around debtors collection or debt reduction as well, so the gross numbers and targets for these would also be useful.
Of course we need to be aware how all of this stuff links together. In my business for example I know that the addition of an ideal client adds approximately “$X” to my revenue. So if I add “Y” new ideal clients I can expect to meet my revenue target of $1,000,000. I also know that the addition of new clients is the key driver here, so my strategies need to be focussed on achieving new ideal clients. I then need to design actions which will lead to new clients which will lead to increased revenue which will lead to my achieving my objective, simple huh? (I did say I could fit a plan on to one page, I didn’t say that there wasn’t a great deal of creative thought in developing the plan, or that it was easy.)
You can get pretty creative here, if you know your business well enough, and you should. You ought to be able to design some fairly simple actions which you can undertake in pursuit of your goals. I know for example, that if I have the opportunity to meet with about 3 new prospective ideal clients, it is likely that I will do business with 2 of them. I know that I need to identify and approach 5 or so likely candidate clients to actually meet with 3 of them, so all I need to do is find 5 candidate clients right?
For a template of a one-page business plan, leave a comment below with your contact details, and I will send you a simple example, or send an email to firstname.lastname@example.org. This is really simple, and someone who is a lot more creative than me could make it look prettier, but it has all of the elements, and it fits on one page.
We’ll talk more about using the one page plan to measure performance in the next article, so click follow at the top of the page to get an email when the post is published!