What do you need in a written business plan?
In good times or in bad times, one thing we at SCORE believe is essential is a written business plan. A written plan can accommodate economic, product or service changes. It is a road map or a safety net, and it can always be updated with fresh ideas about your marketplace.
There are always threats and opportunities, and a plan permits reacting to change. Such a plan is useful when there are downturns or upturns.
What do you need in a plan?
Define clearly your product or services, and both, if applicable. This is your plan’s introduction and mission statement.
Write down everything you know or need to know about your customers. Who are they? Where are they? How will they know or learn about your business? How will you make it easy for them to find out about it? What will be the costs associated with this? This is the marketing section of your plan.
Are you running a service or product business or do you offer both? Is your pricing competitive? Do you have flexibility in pricing? What is your target for sales per day or week? This is your sales plan.
How will you run your business? What are the costs of your product or service per transaction? Include all the costs of personnel and overhead. How many employees will you need? Where are you located (at home or a store or office)? What does this cost? Do you need any employees? Do you have salaried employees and what is their cost (salaries and benefits)? What will be the cost of products or services you sell? What will you need to purchase in capital equipment if necessary? What is the ongoing cost of this equipment? This is your cost plan.
Sales minus costs are your gross profit. Other financial costs may be needed as well to calculate your net profit.
The plan can change depending on new goals or changes to sales or costs. It is a living, breathing document that you can review and change as necessary. Remember that by updating the plan regularly, you can stay abreast of economic or other market changes such as new products, new services or new competitors. Don’t let the plan sit in a filing cabinet.
It is a living document, and it needs to be ready for change.
SCORE is a national, nonprofit organization that offers confidential and free counseling to small businesses. Locally, contact SCORE by leaving a phone message at 252-974-1848, by visiting the website at www.EastCarolina.Score.org or visiting the office on Tuesday and Thursday mornings in the JobLink building, 1385 John Small Ave., Washington.
Score has more than 13,000 volunteers working with 364 chapters nationwide. In addition to East Carolina Score, there are two other SCORE chapters in the area, Down East SCORE in New Bern and Upper Coastal Plains SCORE in Rocky Mount.