Too many business owners look at the business plan solely as the budget or financial plan for their business.  In reality, a well done business plan covers a lot more territory than finances.  Remember, all you really have so far is a purpose and some rules for how you and your team are going to behave.  Now you need a strategy, a comprehensive guide to fulfilling your organization’s purpose.  You need to define your target market and customers, the resources including people, raw materials, plant and equipment, technology, and money necessary to create and deliver your product or service, some idea of how you’re going to apply those resources in each component of your operations, and what results are expected; i.e., what will success look like?

Here are what I consider to be the key pieces of your strategy or business plan:

• Introduction
  • Restatement of Mission, Vision, and Conceptual  Foundation

• Long Range Plan
  • Objectives, risks and measures related to mission and vision
  • Greater than one year
  • Updated every year

• Annual Operating Plan
  • Current year goals, risks and measures related to long range objectives
  • One year or less
  • Updated every three months or more frequently

• Marketing Plan
  • Approach, Risks and Measures
  • Target markets
  • Promotions and advertising
  • Public and community relations

• Sales Plan
  • Approach, Risks and Measures
  • Customer Relationship Management
  • Lead generation
  • Sales process

• Operations Plan
  • Approach, Risks and Measures
  • Vendor Relationship Management
  • Acquisition
  • Production
  • Distribution
  • Other Systems

• People Plan
  • Approach, Risks and Measures
  • Organization structure
    • Practical governance
    • Risk management
  • Employee relationship management
  • Hiring
  • Compensation
    • Base
    • Incentives
    • Benefits
  • Training
  • Termination

• Technology Plan
  • Approach, Risks and Measures
  • Environment management
  • Application management

• Financial Plan
  • Approach, Risks and Measures
  • Capital Budget
  • Operating Budget
  • Cash Flows
  • Return on Investments
  • Owner relationship management

If your organization does a good job with the business plan, it will have a comprehensive roadmap that is focused on one destination, the purpose described in the vision and mission of your organization.  That roadmap will tell you what systems and processes are necessary and how the organization should be structured to be most effective.  It will also provide guidance for effectively managing your most valuable resource, your people.

In upcoming posts we’ll dissect the components of the business plan, showing you how to build and use it most effectively as a better business basic.