Did you know?… 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more, 30% fail due to lack of product-market fit and retail has a 53% failure rate.
One of the top reasons businesses fail is due to the lack of a business plan. So what is a business plan and why is it so important you might ask?
A typical business plan is a 10-20 pages document that details how you will start and manage your business. It serves as a guide for your business that outlines your goals and details how you will achieve them and includes your financial projections.
Hmm, so why is it so important? Well, It serves as a roadmap and will bring comfort and security, especially in uncertain times. A business plan can act as your north star and provide direction when you start to wander. And believe me, you will wander. Remember the shiny objects list I mentioned in the last newsletter? (Review it to learn the 3 lists that help me stay focused & productive).
In addition to being a critical tool to guide decisions, it is also a tool for your team, lenders, investors, suppliers, landlords, and those invested in the success of your business. A business plan is a living document that should be visited on a regular basis. It will evolve as your business evolves. Revisiting your plan will help you better understand the needs of your business. It will also help you answer the question “what can I do to help?” Which is a question you will get asked a lot especially when networking.
A business plan doesn’t need to be a tome. It will take many forms and your first version may even be something that you scribble on the back of a napkin. Some of my favorite tools are a lean canvas and a one-page business plan.
Components of a Business Plan:
◼️ Executive Summary
◼️ General Company Description
◼️ Products and Services
◼️ Marketing Plan
◼️ Operational Plan
◼️ Management & Organization
◼️ Start-Up Expenses & Capitalization
◼️ Financial Plan
◼️ Appendix (additional information like drawings, photos, technical specifications, etc.)
If you have any questions regarding business development don’t hesitate to reach out. I’ve developed some great tools over the years that I’d be happy to share. 😊
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