For any entrepreneur, especially the first-time entrepreneur, a business plan is essential to your success because it’s your road map. Top projects in Alberta construction inevitably stem from comprehensive business plans that guide entrepreneurs through project start up to construction, day-to-day operations, cost, marketing, and an exit strategy. Contrary to popular belief, business plans aren’t written just to secure financing, they’re so much more important than that. In fact, a thorough, well-researched business plan will detail your goals and objectives, helping you to determine if your venture is feasible and worth pursuing. Not only will your business plan show investors that your business will be profitable, but it will also ensure that you are well-prepared to shoulder the responsibility of business ownership.
Ultimately, your business plan should clearly illustrate your mission, vision, and business goals; support future growth; secure financing; differentiate your company from competitors; provide an overview of your clientele and their purchasing behaviours; assess your company’s strengths and weaknesses; help manage your costs and cash flow; and support an exit strategy. Trying to enter the Alberta economy without a business plan is like scuba diving with snorkeling equipment – you’re going to come up short. A business plan prevents you from running out of money, missing sales projections, losing customers, becoming overwhelmed, and going bankrupt. While a business plan is an arduous process, the more work you put into it, the better prepared you will be. All successful business plans share the same elements: an executive summary, a business and marketing strategy, an operational plan, a SWOT analysis, a market analysis, an HR plan, a social responsibility strategy, an e-business strategy, a financial forecast and budget, and an exit strategy.
Your executive summary provides an overview of the entire business plan, so you’ll likely want to write this section last. However, it is crucial to securing financing and should include major points from every section of the plan to provide a clear and concise overview of your business plan. You’ll want to write this section with a touch of flair, to keep it interesting for your reader – this is your opportunity to show your investors how passionate you are about the business and hook them with your concept and competitive advantage. Additionally, you’ll need to include your legal structure, an overview of the market you’re entering, and your own personal experience.
Business and Marketing Strategy
In this section, you’ll flesh out the purpose of your business, your vision, and your goals and milestones. Describe your products or services and how you’ll contribute to your market and industry. You’ll want to answer these questions:
- What is the state of the industry you’re entering? Is it growing? Stable? How will this affect your business?
- What is the structure of your business? Are you a sole proprietor, a partnership, or corporation, or a cooperative?
- Where is your business? Are you leasing or building?
- What is your competitive advantage? How will you differentiate your business?
- Who are your competitors? What are they doing well and not so well?
- What is your business model and why is it effective?
- What are your goals and milestones? How do you plan to achieve them?
- How will you promote and sell your product or service? Provide research and stats to back up your plan.
- What is your marketing budget?
- Who is your ideal client? Provide a profile.
Outline your operational requirements from start up through to five years in the future. Include a description of your daily operations, facility requirements, how you will manage information and inventory, and IT requirements. It’s a good idea to include your operations manual in an appendix.
A strengths, weaknesses, opportunities, and threats analysis (SWOT) helps you to realistically consider the success of your business while also illustrating that you’ve been rigorous in your research and planning. This is the section where you highlight the weaknesses of your business and demonstrate how you will manage these challenges. Do not overestimate your strengths or overlook weaknesses, you want a clear picture of how your business will work.
Often overlooked but essential to any business’ success is your human resources management plan. How you will recruit, train, and retain employees is crucial to your business’ success. Provide an organizational chart, job descriptions complete with necessary skills, employee training program, employee benefits and incentives. Also outline how you will promote job opportunities and how you will attract qualified and dedicated personnel.
Social Responsibility Strategy
A surefire way to give yourself a competitive edge is to put policies in place for environmental stewardship and community contributions as well as certifications (e.g. LEED construction). Think about how you want to give back and promote yourself as a community minded, environmentally aware business.
Even if you’re not going to be selling your products online, you will inevitably use technology as a part of your business (i.e. website and social media). Outline how information technology will complement your business strategy and how it will save money or benefit the business.
Financial Forecast and Budget
Numbers, numbers, numbers. For this section, you will need financial projections and forecasts for the next five years, giving the most detail for the first year. You’ll need to include cash flow statements, profit and loss forecasts, and sales forecasts. This section will demonstrate how much money you need to start up and operate and it should cover a range of situations and contingency plans. You’ll want to work with industry experts to assist you with this section.
All too often, we’re thinking about how we want to get into business without considering how we’ll want to get out. What are you goals? How do you want to leave your business? Do you want to sell it? Do you want to pass it on to your children? Whatever your exit strategy is, you’ll want to prepare for it and your business plan is the perfect opportunity to do that. Plus, it shows that you’re considering the business’ entire lifespan.
Our team of experts at Cormode & Dickson has a wealth of experience helping new entrepreneurs with their business plans, if you want to become an entrepreneur and are ready to get started, contact us today.