If you’re old enough to have ever bought a vinyl record single, you may remember that they were usually cut with A-side and B-side versions of the same song.
The A-side contained the version most likely to be a hit with radio stations and the general audience, while the B-side would play an alternate, more obscure but perhaps more artistic interpretation. Creating a business plan is not much different.
The A-side is the polished, fluffy draft we’ve been trained to present to lenders and investors – the hit. The B-side business plan, however, should be a more detailed, realistic version of the company – a reference guide and roadmap that helps business owners stay focused and complete tasks toward stability and growth.
I adopted this philosophy last summer while reading parts of Jim Smith’s How to Start a Home-Based Web Design Business, which recommends a second, navigational version to help entrepreneurs stay on track. To Smith’s recommendations, I added major elements from a business plan continuing education (CE) course I took at a local community college, a couple of section headers from my Integrated Marketing Communications capstone project, and some insights that I’m still digesting and adding in from The Marketing Agency Blueprint by Paul Roetzer.
The result – at least to date – is this B-side outline of my revised business plan. The amount of detail is deliberate as my goal is to now have an overall reference guide and a resource for when the question arises – what the heck are we doing? Which it frequently does.
This section should begin with the simplest statement of what your business is about. Whereas the mission and vision statement will be more official and eloquent, be sure, begin with a sentence or two in layman’s terms. I also added some general facts including the NAICS and SIC codes and other miscellaneous founding details.
- Mission and Vision Statement. There are endless examples of how to write a mission and a vision statement for your company, some of which can add to the confusion as to what is the difference between the two. Just remember that your mission is an outward-facing purpose for your business, usually focused on some target group. The vision statement, however, offers a visual – some ideal state that you see your company achieving.
- Legal Structure. Include details such as the contact information for all city, county, state, and federal offices, expiration/renewal dates, a list of founders/partners, and consider adding links to photocopies of official documents in the plan Appendix.
- Principals/Management. Detail your company’s organizational structure and include the qualifications and responsibilities of the founders and any key management personnel. If you have an advisory board – an unpaid group of experts who can offer you valuable information on various aspects of your business – list their names and qualifications in a separate subsection. Roetzer suggests that the advisory board include contacts from “core business areas such as finance, technology, human resources, legal, and accounting.”
- Operational/Infrastructure Details. Here’s where some of that B-side type of information gets added. Everything up until this point is pretty standard for a regular business plan, but adding details like operating hours, online listings, and a catalogue of third-party solution providers not only turns the plan into a valuable reference tool but makes you stop and consider the operational details that affect how you do business. Think web host, phone system, time tracking, print vendors, financial management tools, etc.
My business plan lists short-term goals followed by a set of corresponding objectives. These objectives should not only be measurable but include set dates so that, when achieved, you will have accomplished your short-term goals within the year. List long-term goals separately and revisit them during an annual plan revision.
The market analysis is probably the most time-consuming section of the business plan. This should include information about your industry and its competitive outlook; your target market and, if you’ve carved out a B2B niche, that market’s industry; and any other information about the external environment. This step will also help you develop a SWOT analysis plus discover how you can differentiate your company and perhaps refine your business idea. Some sources to help compile this information include:
- The U.S. Census Bureau
- Industry Trade Associations
- Annual Reports of companies within a particular industry (sometimes posted on the websites of publicly traded companies.)
- Nielsen Claritas
- GfK MRI (register to be notified about webinars and other news)
There are also a number of databases requiring paid subscriptions. Your local or school libraries may provide access to additional sources of market information.
Know of any others? Please note them in the comments.
Products and Services
Write a detailed list of the products and/or services you offer, including any value-added features or benefits. Will you offer any cost-savings bundles? Are there any high-demand items that you can use for product marketing (as opposed to just promoting your company)?
Depending on the type of business you’re in, this may also be a great time to think about (and maybe write down) what you DON’T do or need to grow into. Now go back to your business description and mission. Do your products/services reflect who you say you are? Do they meet some need that was uncovered in your market research?
The financial section (particularly pricing) needs its own separate article. Keeping in the spirit of the B-side business plan, I would recommend placing the pricing system directly into the plan.
Not just profitability estimates or projections but detailed calculations that consider sales tax (if applicable), federal taxes, cost of goods (if it’s a service, think about those third-party solution providers), and anything else that reduces your net earnings.
I’m working through my pricing guidelines using some concepts from an older version of The Designer’s Guide to Marketing and Pricing, some updated thinking from Roetzer’s book, and current trends in the market.
This piece may be the greatest detour from the regular business plan. Whereas the usual intent of the financial section is to convince lenders or investors that you have a sound business idea, the goal of the B-side version is to convince yourself. Include an operating budget and format your Accounting methods. This might be a good time to call a CPA.
Yes, I’m adding my branding guidelines to my business plan. This used to be a separate document, but now I feel that it’s connected to my business purpose, mission, and vision statement and is essential to the idea of staying on track. Branding should not only include visual guidelines but your company’s brand personality and positioning statement.
Integrated Marketing Communications Plan
Establish a separate set of goals and objectives when developing an IMC strategy for your business plan. While your marketing activities will help you reach your business goals, the marketing piece needs to function almost like a separate addendum.
When your business plan is complete, go back to the beginning and dress it with a cover page, Table of Contents, and an Executive Summary. Write some concluding thoughts and add an Appendix to include any important documents, resumes, etc. Establish a plan to evaluate your activities at set periods throughout the year and update your business plan annually.
If you ever need to present your business plan for financing, remember to flip it to an A-side version by removing most of the operational/infrastructure details, streamlining the products and services section, fluffing up the financial section, and deleting the branding guidelines.