How to Write a Winning Business Plan

Writing a business plan can be a lot of hard work or it can be great fun; you have to choose which stance you’ll take. An effective plan can help your company to greatness while a poor one can put you out of business. Not having a plan is like asking to fail before you even start.

Not every business needs a 200 page bound business plan. Every business, however, needs to have some idea of where they want to go and how they are going to get there. This article covers some key insights into writing a business plan that get your business to where you want to be.

Analysis

The first stage of any plan is ANALYSIS. You need to take a very objective look at a number of factors that may impact your business. There are many factors to consider but the two major ones are competition and your operating environment.

Let’s look first at competition. Every business has competition, even if you think your product or service is unique. How is this? Well it’s quite simple really: people have choices to make. The most fundamental choice they make in most cases is whether to buy what you offer or buy something else. For example, I could buy a game console or I could buy groceries instead. Customers only have so much money available so you first task is to ask yourself what is my competition like and can I beat them? The more you understand your competition the more you can develop your business strategy of being different and outperforming them.

Now let’s look at operating environment. This is understanding what factors around your area of operation are likely to affect your business performance. For some companies this includes looking around the world; in other cases it’s just your local neighborhood. You need to ask questions such as:

  1. How is the economy going?
  2. What is consumer confidence like?
  3. Where is technology heading in my industry?

After answering all the questions you need to decide how these might negatively or positively influence your performance.

Objectives

Now that you know more about your competition and operating environment, it’s time to set some OBJECTIVES. This is what you want to achieve in the period your business plan covers. It is said that good objectives are SMART. That is specific, measurable, achievable, realistic and targeted. Here’s an example of a SMART objective for a hypothetical business.

  • “By the end of this year we will have increased sales of product X by 7.5% over the previous year.”

You can see how clear this objective is. It is much easier to achieve high performance with clear objectives.

Strategy

Now you need to outline your STRATEGY. How are you going to reach you objective(s)? This is where your marketing plan often comes in as it helps describe the programs you will run to achieve your desired objective(s). To continue the example above our strategy may be to gain distribution for our product in one new major retail chain.

Resources

To make your strategy work you must then allocate appropriate RESOURCES. Certain things must be provided in order to reach your goal. This could be dollars, people, equipment, etc. Your plan must have included the resources you are allocating and why you believe this is adequate to get the result.

Projections

Every business plans also has some PROJECTIONS. Are you expecting a profit or loss? How much?

Contingencies

Lastly you need to allow for CONTINGENCIES. Things change all the time and your plan needs to consider these possibilities in advance. A good way to do this is to ask What if?

  • What if a new competitor enters our market?
  • What if a distributor blacklists our product?
  • What if interest rates rise?

Your analysis should give you some idea of likely contingencies. It saves a lot of stress if you have some documented ideas for dealing with them before they become a big problem.

Writing a business plan is never perfect; the plan is on paper and you’re operating in the real world. A good plan, however, can really guide you in the right direction. Take time to put real thought into preparing your plan an above all make sure you USE YOUR PLAN!

Want to Inspire? Start with Why

When a mission statement is well written, it serves as a declaration of purpose. But corporate mission statements are often little more than a descriptive sentence about products, aspirations or desired public perceptions. They’re more powerful when they clearly and specifically articulate the difference your business strives to make in the world.

Here’s an example from Roy Spence’s book It’s Not What You Sell, It’s What You Stand For:

Consider this mission statement by a large grocery chain: “Our goal is to be the first choice for those customers who have the opportunity to shop locally in [our stores]. To achieve this goal [we] aim to be best at fresh, best at availability, best at customer service, best at product and price.”

It’s a long list of what the company will be best at, but nothing about customers, employees, communities or society. Compare that with another food chain’s mission statement:

To help consumers find foods that offer more nutrition for the calories as they make choices in each department of our stores, thereby helping food shoppers make healthier choices.

Which statement do you find more engaging? If your mission statement isn’t compelling and engaging, you can’t expect employees to care, can you?

Leaders who want to succeed should straightforwardly communicate what they believe in and why they’re so passionate about their cause, according to business consultant Simon Sinek, author of Start with Why: How Great Leaders Inspire Everyone to Take Action (Portfolio, 2010).

Most people know what they do and how they do it, Sinek says, but few communicate why they’re doing it.

“People don’t buy what you do; they buy into why you do it,” he emphasizes.

If you don’t know and cannot communicate why you take specific actions, how can you expect employees to become loyal followers who support your mission?

The world is before you, and you need not take it or leave it as it was when you came in. ~ James Baldwin, author

I’d love to hear from you: what’s been your experience with the mission statements of the companies you’ve worked for?

Are You Suffering from The Progress Paradox (part 2)

The Psychology of Success

Positive psychologists seek to find and nurture genius and talent and to make normal life more fulfilling, not simply to treat mental illness. By scientifically studying how things go right in individuals and societies, we can unlock the mysteries of peak performance to gain more satisfaction from our work and lives.

Here’s what many people believe about work:

If I work hard, I’ll be smarter.

If I’m smarter, people will notice and I’ll get promoted.

With more responsibility, I’ll be even more successful.

If I’m more successful, I’ll be happy.

But it doesn’t work this way.

Instead, our brain chemistry kicks into gear when triggered by a stimulus. Perhaps we’re working on a challenge that particularly intrigues us. We’re in a positive mood. Biochemically, we feel pleasure when the neurotransmitter dopamine is released into the brain. As a result:

  1. The brain turns on its learning centers.
  2. We are more open to exploring new ideas.
  3. We build new solutions.

If we feel positive while performing a task, we dramatically increase our levels of intelligence, creativity and productivity, while lowering levels of negativity, boredom, proneness to errors and disengagement.

Thus, positive feelings prime the pump for success.

Priming the Positivity Pump

To prime yourself for success, start a task in a positive mood. One way to accomplish this is to engage in something pleasurable first – even if it’s just fantasizing or reading something funny. Exercise is known to help.

Try smiling at someone. The evidence is clear: Smiling produces positive feelings in both giver and recipient. Our brains’ mirror neurons are particularly responsive to smiles, not to mention other facial emotions (anger, disapproval or worry). It’s almost impossible to smile at someone and not get a smile in return – but remember that sincerity is required.

If you’re a leader or manager charged with getting things done, a smile helps ensure better results and cooperation – something most parents already understand. We know emotions are contagious, yet how many of us transmit negativity and stress by forgetting to smile at work?

Make a conscious effort to create a positive work environment by smiling more often and being positive instead of stressed out. The more positive the mood, the better people work – and this includes you.

It may seem incongruous to “pretend” to be happy and successful before you set out for your day’s tasks. But the evidence is clear: Tapping into whatever positive mood you may have within you will set you up for more creativity, happiness and success.