Whether one is introducing a new product line, product extension, or starting a small business from scratch, being prepared and having a business plan is essential to success. Producing plans of this caliber can be a daunting task, and without experience in creating such a plan, one could find themselves stuck with little means of moving to the more exciting and profitable implementation phases of a rollout.
The 12 components of a successful business plan include:
1. Overall business and profitability statement / executive summary
If there are stakeholders that need to be convinced a plan of action is necessary to grow or start a business, a strong and convincing executive summary is necessary to convince those viewing the plan it is worth the investment of time, effort, and/or money. In this segment of the plan, it is important to show a clear and concise path from concept to profits. The conclusions drawn in the executive summary must be supported in the analytical segments of the plan.
2. Intended audience
Is this plan intended to be seen by everyone in a company or just top management? It is very important to state this clearly at the beginning of the plan so that those who read it recognize the limits of its distribution. This section also helps to recognize those who will be reading the plan and to let them know they are a part of something special in which only few are privy to the details.
3. The development process
How will the product, service, or market be expanded or created? Those creating a business plan may not necessarily know these details at first, but by dedicating a portion of the plan to this information, those who understand this part of the process can help to fill in the blanks.
The foundation of successful business plans is keeping stakeholders on track in regard to their deliverables and ensuring the milestones of the plan are either achieved or the roadblocks to achievement are exposed. Without a strict and detailed timeline to achieving the goals of the plan, the likelihood of success is cut back significantly.
5. Customer needs
To lay the foundation of any new product or service, one first must recognize why there is a need in the market. This segment of the plan is important to the value proposition that will eventually be used to promote the product or service.
6. Target market
Where will the product or service have the greatest chance of sales success? Knowing the market or markets a new product will be welcomed is of course the foundation of a launch that will make the greatest splash.
7. Competitive landscape
Most of the time spent on a business plan should be understanding the competitive landscape. Today more than ever innovation is only a heartbeat away, so ideas that may be new to an entrepreneur or business may not be new to the billions of people online generating new ideas and acting on them throughout the world. Without a strong competitive analysis, businesses and entrepreneurs can spend countless time and money crafting the perfect go-to-market strategy only to find too late that someone else has done the same with limited success or the market is saturated with suppliers with limited profitability.
From a strong market and competitive analysis, pricing of a product or service for introduction into the market is easier and ensures greater odds of success. In this part of the business plan, it is imperative that all cost elements to bring a product or service to market is recognized.
9. Features and benefits
A strong understanding of the features and benefits of a product will help to understand how a market will be penetrated and lay the foundation for the marketing messages. This also underscores the value proposition of the product that will help to convince other stakeholders the necessity of working together to achieve the goals of the plan.
Packaging is not just the physical packaging that surrounds a product, it is also how the product or service will be presented to the customer conceptually. Will the product be bundled with other products, or will it be a standalone service or item? These are all elements of the packaging of a product.
11. Marketing elements
Segmenting part of the plan so that the different marketing tactics are understood will bring together many of the former elements of the plan. A number of questions should be answered: How will the product be introduced into the market and promoted over time? What social media elements are to be considered? Where is the audience that would be interested in the product online and elsewhere? What traditional marketing tactics will be considered? How can the press help to bring awareness of the new product or business?
Understanding how much money is dedicated to the different elements of a project will help entrepreneurs understand their best return on investment. If most of the budget must be spend on development and therefore there is very little money for promoting a new product or service, a focus on a strong media push/publicity effort may be necessary. In the case of a budget that is large enough to help make a splash in the market, understanding where the greatest return can be realized will ensure continued success.
A strong business plan is the foundation of any new business or product. These elements are key to a well-rounded plan that considers all the most important elements. Other considerations one may want to entertain include how conflicts will be resolved, legal considerations, security measures, workflows, and engineering plans. With the right elements to a business plan, an innovator can help to ensure success in the long run.