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Helping Your Clients Develop an Effective Business Plan


Some business owners think that a business plan is too difficult or time consuming to pull together – not a worthy time investment unless they are actively seeking funding. That is unfortunate. Preparing a formal business plan offers a multitude of benefits, including better strategic vision and redefined priorities.

Help your small business clients reap the benefits by following these steps to develop an effective business plan.

1. Dip into your client’s wisdom

No one knows your client’s business as well as they do.  Encourage them to dream out loud and talk about goals, targets, and desired impact. Where do they want their business to be in five years?

2. Research, research, research

A business plan is more than just a dream. Viability is in large part determined by grounded assumptions. Encourage your client to research the field thoroughly. Think through opportunities, growth prospects, and competition.

A note of caution about using financial data. Some clients have a misconception that the strength of a business plan lies in elaborate analytics. Explain to your clients that, while ensuring the plan is based on solid numbers is important, doing excessive financial acrobatics is unnecessary.

3. Spend time and effort on the executive summary

The process of preparing an executive summary for their business plan forces business owners to crystallize and condense ideas down to their core. That, in turn, requires deep thinking and a thorough understanding of concepts, timelines, and interdependencies. If the business plan will be used to seek funding, this may be the only part of the plan that decision-makers will read. Even if the business plan is prepared for internal use, testing ideas by paring them down is a useful exercise.

4. Focus on impact and outcomes at least as much as on the method

Business owners are often tempted to see their unique offering through the filter of their business processes. To them, a proprietary technology, a secret ingredient, or a 15-step assessment methodology is what makes their offering special and valuable. The reality is that the customers rarely care about how the business owner got the product or the service to come out the way it does. They are buying the end state: problem solved, hunger filled, pain relieved. Encourage business owners to spend at least as much time on impact and outcomes to customers as they do on their methodology.

5. Keep it brief

Lengthier is not better. A 100-page business plan is not necessarily more effective or thorough than a 30-page one. Challenge your clients to eliminate sections that do not contribute to the impact of the document.

6. Don’t underestimate competition

An honest look at competition is a critical component of a great business plan. Consider competitors’ strengths, study their decisions, and learn from them. Where does your client have a competitive advantage and how durable is it?

7. Consider the marketing plan

A marketing plan is critical to turning the product or service idea into a reality. Even if your small business owner clients dislike marketing, encourage them to consider how they will get the word out to boost sales.

8. Remember that even the perfect business plan is wrong

A business plan, even when impeccably researched and footnoted, is wrong the moment you finish it. The competitive landscape changes daily, and real life rarely plays out exactly as you plan. That is not a good reason to skip planning, because going through the process helps your small business owners deal with the ever-changing reality. However, it’s important to understand the limitations of the business plan and prepare for some fluidity in execution.

In closing, the most important part of a business plan is translating it into concrete actions. The process of compiling a business plan encourages your small business owner clients to consider their priorities, resources, and alignment between the two. Living the business plan – in other words, putting resources, effort, and thought behind what is most important – is where the value of a great business plan shines.

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This article contains general information only. Sunflower Bank is not, by means of this article, rendering accounting, financial, investment, legal, tax, or other professional advice or services. This article is not a substitute for such professional advice or services, before making any decisions related to these matters, you should consult a qualified professional advisor.