The four components of an effective start-up business
Having a well-thought-out start-up business plan can help a northern Nevada business owner stay focused on company goals and objectives. Yet according to a recent Wells Fargo survey, only 33 percent of small business owners said they have a formal, written business plan.
Even though many business owners have ideas for plans in their heads, those who put plans in writing are more optimistic about the coming year.
In the survey, business owners with formal plans were more likely to say that in the next 12 months they planned to add jobs at their companies, expected revenues to increase, anticipated increasing their capital spending and intended to apply for new credit.
Why do business owners with written plans have more optimism?
While there may be many reasons, from our experience working with small businesses in northern Nevada, business owners in general benefit from creating a formal plan because it serves as the foundation for long-term success. It can help you prioritize how to spend your time and money, and set effective business goals.
The challenge for many business owners is getting started. To help, we’ve identified four critical components that should be in any business plan. Here are the key areas we recommend for every plan:
The overview should provide a description of the business, including what products or services you sell. It should outline your professional or industry experience, the history of your business, and your business structure, including staffing and management roles and responsibilities. In addition, the overview should house a detailed marketing plan.
Competitive intelligence and customer insights are a key part of developing your business plan. In this section, you should include data on competitors within your industry. It’s also a good place to explore prospective customers that might be a fit for your products and services and define how you intend to reach them. Building this information into your business plan is intended to provide you with a competitive advantage, and helps you to fine-tune your marketing efforts and maximize sales.
A business plan should include a financial data section. It’s the place to outline your starting balances, how you plan to make money and sales forecasts. Keeping financial information updated and organized can be a challenge for many business owners, yet an essential process to more easily plan for growth, manage cash flow and prepare for unexpected expenses.
This part of the plan is often considered the most important when seeking financing. This section provides a high-level summary of the business, and recaps the key features of your business plan in one page or less, including who you are, what you sell, and who you sell to and a financial summary.
To help simplify the business planning process, Wells Fargo recently introduced a new, comprehensive resource on WellsFargoWorks.com called The Business Plan Center. This new, complimentary offering includes two new tools:
The Business Plan Tool is a step-by-step guide for creating your own written business plan;
The Competitive Intelligence Tool provides business owners with up-to-date insight on competitors in the market.
The Business Plan Center delivers an integrated learning experience, and is available to all business owners — both customers and non-customers. It is a natural extension of the support we currently offer through Wells Fargo Works for Small Business.
Developing your business plan isn’t a one-time process. It requires regular maintenance as your business evolves and your needs change. Every business owner will experience successes and challenges on their entrepreneurship journey, and revising your business plan during these times will help you celebrate accomplishments, establish new goals, and plan for the future based on lessons learned.
As a business owner, your focus is on running the business, and time away from day-to-day tasks is limited. Yet we’ve learned from business owners we serve that taking time to develop and maintain a streamlined business plan can save time and better manage your money in the long run.
Lester Romero is the Small Business Manager for Wells Fargo in northern Nevada. To help more small businesses achieve financial success, Wells Fargo introduced Wells Fargo Works for Small Business — a broad initiative to deliver resources, guidance and services for business owners. For more information about Wells Fargo Works for Small Business, visit: WellsFargoWorks.com.
Another sweep by Nevada OSHA officials on July 3 showed 82% of Northern Nevada businesses complying with the mask order, compared to 75% in the south.