Writing a Business Plan: A Guide for Your Small Business

A succinct guide to plotting a course for your business

Writing a Business Plan: A Guide for Your Small Business

What should I put in the executive summary?

Chances are that the executive summary, normally making up just one or two pages of your business plan, is all that will be read before a prospective investor, lender or employee makes a decision about your business’ viability.

This might seem somewhat harsh, but it’s the truth, so your executive summary needs to be concise, compelling, and generate real excitement about your business and what it offers.

It will mostly take the form of a bullet summary of whatever else is in your business plan – your vision, your objectives, your structure, and where your business is going.

However, to make people excited about what you offer, you should focus on your USP, or ‘unique selling proposition’; essentially, what makes your business stand out from the crowd. This can be broken down, somewhat predictably, into three elements:

  • Unique. This doesn’t just mean having the overall best product, or the cheapest; it’s the two or three biggest benefits to using your product or service over others that makes up the uniqueness of your offering. Focus on why customers should choose you over competitors. For example, US courier company FedEx used the slogan “When it Absolutely, Positively Has To Be There Overnight” to differentiate themselves for years.
  • Selling. How do you get customers to part with their cash? For example, department store John Lewis uses the slogan “Never Knowingly Undersold”, reflecting the principle that even though their products are not cheap, the prices reflect the real quality of what they sell.
  • Proposition. How are you solving a problem or pain point for your customer? Another example – Domino’s Pizza decided the main customer pain point was the wait for pizza so they adopted the slogan “Pizza Delivered in 30 Minutes or it’s Free” as a response to this.

 

As well as this, you should outline where your business stands in relation to the market and competition. This will include:

  • An explanation of the market. Describe the sizes of the segments of the market, your share of it, and important trends (such as the growth in demand for a particular product).
  • Existing customers. Describe how they match up to the chosen market segment and the concentration of sales around them.
  • Your competition. Describe the competing products, services and suppliers – and be careful not to dismiss or openly criticise them. Soberly assess their advantages and disadvantages compared to your own, in terms of price, quality and so on. Explain why your customers choose you over them.

 

How should I set out my vision, mission and values?

A well-founded business may well change its course from time to time, but the general direction of travel should be set out for the long-term in these three statements. They should include:

  • Vision: A vision is the overarching, all-encompassing statement which defines your business – you might not see how the vision could be achieved, but you should be able to see how great it would be if it was. For example, Microsoft’s company vision in 1990 was “a computer in every home” – a far-off dream at the time, but something that is much closer to reality now.
  • Mission: A mission breaks down your vision into a direction statement, which focuses on the essentials which encapsulate your specific attributes in relation to the market/customers you plan to serve. Essentially, it describes what business you are in and your purpose, and what you want to achieve over the next one to three years (your strategic goal). In particular, your mission statement needs to:
  • Be narrow: It should be narrow enough to give direction and guidance to everyone in the business. Only by focusing on specific, achievable needs can your business differentiate itself from larger competitors.
  • Open up a market share: The mission as it stands should open up a large enough market to allow you to realise the business’ potential and achieve your strategic goals.
  • Be realistic, achievable, and brief: Toys R Us’ mission is “to be the world’s greatest kids’ brand”, whilst Starbucks’ is “to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time”. Neither mission statement says anything about products or services, but focus on the customer – use these as inspiration from your own.
  • Values: What do you ultimately stand for? This is where you set out the values your employees can use to guide their own behaviour when working for you – so if you put good customer services over your bottom line, staff might be more minded to offer customers refunds and bend the rules to help them.
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