Web Business Ã¢â‚¬â€œ The Business Plan, an Introduction
The business plan is the single most important document you possess (or perhaps don’t possess, in which case you need to keep reading) as it contains all of the information in one place for starting or driving your business forward. If you haven’t already, please read the introduction to web business I wrote recently, here. Running a web based business shares many similarities with traditional business models, but in some respect it takes even more detailed planning. Therefore the business plan becomes of central importance to all potential and existing web entrepreneurs. Creating a good business plan, and by good I don’t just mean one that looks pretty, but is also useful to you and other potential stakeholders in your business, is not an easy task. Business plans are often misunderstood and quickly become obsolete as the business moves forward. A good business plan is an organic document, in that it changes as the business grows. It is also a document which allows the business owner to develop a clear strategy depending on the environment in which they find their self. Therefore much care needs to be taken in the development of one’s Business Plan.
This is a great article to begin what I hope will be an ongoing series of Business Planning related articles, as a business plan will contain many of the things I will be talking about at length in the coming articles. A business plan will contain a clear mission statement, which facilitates a set of clear goals and aims, in turn from which a clear strategy and key performance indicators will be drawn. Each of these sections will be getting their own article as the amount of information around the subject is large. For now allow us to concentrate on a high level overview of the constituent parts of a business plan and the rationale for including them.
The first and arguably most important part of a good business plan is the mission statement. A good mission statement will capture the essence of your business in a simple motto which lets you, and anyone who reads it, understand instantly what you do and how you do it. From this statement, all other things flow, and developing one is no easy task as it is difficult to capture all of your ideals and aspirations in one short statement. Mission statements are important because they keep everything else focused. When developing a web based business there are so many things involved that it is easy to lose sight of that first great idea that drove you to develop your idea in the first place. They are the alpha and omega and everything else you do should be bookended by your mission statement. A mission statement is a broad introduction to your business; it is the job of the aims and goals to define how you will achieve the mission statement and deliver your business to customers. Aims are, broadly, actions and behaviours you value and that will enable you to fulfil your mission, and goals are the milestones of achievement you will use to measure your success. Again these are all difficult to set as they need to be developed with great care. The Mission Statement aims and goals will drive the business and form the core of your strategy for success. Again, I will be exploring these in more depth very soon.
The next parts of the business plan deals with the nuts and bolts of your operations. The section, broadly called Operations, will have a number of specific and generic headings which are necessary to your business. It is a good idea to brain-storm a number of headings which form all of the actions and functions of your business. The generic headings that all businesses include are: Key Personnel, Operating Standards, Marketing and Contingency Planning. This section deals with all of the specifics to how you deliver your products and services to your customers and should be detailed, but also allow room for development, as I said right at the start this is an organic document. The importance of this in your plan cannot be understated, as it allows a broad number of stakeholders, from employees and investors to you and your management, a snapshot overview of how you do things. Operational planning will form a large part of future articles in this series and the importance cannot be understated.
The final section comprises the financial fundamentals of your business. Many people believe wrongly that this requires some specialist accounting knowledge, and of course having someone who knows a thing or two about accounting is useful, but a good financial plan can be developed by anyone regardless of their training. Fortunately for you, readers, I am an accountant by training (if not profession, I prefer writing as a job) and when I develop this section in my ongoing series of articles I will be including a number of open source pro forma spreadsheets to help you plan the finances of your business. Broadly this section will include a breakdown of each department’s budget, an estimate of cash flow and a detailed section on asset investment. The rationale behind this section should be obvious, in simplest terms it is a detailed financial plan of all investment and all future revenues generated by your business.
All of this may sound a little grand to you, but one point I have learnt (and learnt the HARD way) is that no business is too small to invest the time in developing a good business plan. It really is the difference between success and failure, and almost always it is the difference between just moseying along and making a real success of your business. Look out for the next instalment in this series, Mission, Goals and Aims ¢â‚¬â€œ A Guide to Developing your Strategy. Stay Tuned!