Business plans; to write them or not? Some entrepreneurs adhere to this standard protocol. Others go by the learn-as-you-go method. Whether you prescribe to one or the other (or both), research shows that your best bet is to create some form of a plan. It doesn’t have to be your stereotypical spreadsheet; in fact, we recommend that you don’t.
As Harvard Business Review states, spreadsheets boil the 3D, non-linear world into a linear, 2D growth chart, which isn’t that realistic. It’s no wonder then why you may not like business plans, as often times they don’t quite pan out and you’re left scratching your head, wondering what went wrong. To ensure this doesn’t happen, read on to learn how you can create an action-oriented (doable) business plan. (Plus, find out why you may need to conduct a GA secretary of state business search.)
1. What Type of Business Entity Most Aligns with Your Vision?
If you’re getting your business idea off the ground and haven’t registered with the state or federal government yet, you need to put this on the top of your to-do list—and incorporate whatever business entity you choose into your business plan.
Because, the fact is, different entities will affect the amount of profit you receive (and keep). For instance, while sole proprietorships normally are the easiest and most low-cost structures to start off with, in time when more revenue trickles in, the high tax rate (around 30%) can cut into your profits. This is not always the case with corporations, however, there is a give and take—(you will face double taxation, for instance, when you register as a C Corporation).
How does this affect your business plan? Simple. If you have a dollar figure in mind that you want to hit, depending on the business entity, it may take you longer (or not as long) to reach that goal. (If you’d like to know more about choosing a business entity, read our article, “What Business Structure is Best for You.”)
2. What is Your Business Growth Goal?
Harvard Business Review states that entrepreneurs who do create a business plan are 16% more likely to follow through with it versus those who don’t plan. At the same time, the article goes on to state that those who are very growth-oriented are 7% more likely to write up a business plan. What this shows is that setting a business growth goal and devising a plan to hit it pays off.
So, what exactly is your business growth goal? Is the time limit you are setting realistic? One way to ensure you come up with a realistic business growth goal is to create a logistic growth model. As Harvard Business Review states, this is made up of your business growth goal at a steady state, what you assume your first year of revenue will be, and how long you think your business will be able to get to half of your business growth goal. From there, you can get a more realistic timeframe of how long it will take you (based on your revenue today) to hit that number.
3. How to Make Your Business Plan Doable
Now once you draw up a business plan, how do you make it doable? Because, let’s face it, it’s one thing to write up your company’s goals; it’s another to carry them out. If you find yourself struggling with the latter, read more to find out how you can set your plan into motion and accomplish your business goals.
Break It Down
So, you’ve come up with a business growth number you want to hit; you’ve created a logistic growth model and have estimated the length of time it will take your business to reach the halfway point.
Why not even break this number down further? How long will it take your business to reach the 25% mark? According to Forbes, by breaking down your goal into smaller chunks, you make the impossible all of a sudden very possible—in other words, your plan is now more feasible.
Review, Review, Review
Not only do you need to break down your goal into manageable steps but also make it a point to review your progress on a regular basis. Doing so will allow you to assess whether you are on track or if you need to make some changes to get the ball rolling again—such as hiring a consultant and delegating more tasks, to name a few.
Make Your Business Goal Known
While you may not want to advertise your sales goal to your competition, it surely doesn’t hurt to make it known to your employees. You may even want to incentivize them into helping you achieve this goal. This can be done by giving out bonuses to the highest performers or take your employees out to eat or give them the day off.
Why not take it a step further and ask your employees what incentives they’d most like to have? By doing this, you communicate that you value their input.
Creating a business plan (and sticking to it) will propel your company to the next level. While finances aren’t everything, Harvard Business Review reports that entrepreneurs who are looking for external finances are 19% more likely to follow through with the vision outlined on their plan versus those who aren’t seeking this. So, yes, creating a business plan does pay off (no pun intended). Still, what you don’t want to do is simply write down your goals; get specific and refrain from using the dreaded spreadsheet. What other tips do you have when coming up with a business plan? How have you stuck to it and what were your results? Let us know by commenting below.
Considering Conducting a GA Secretary of State Business Search?
What about a New York entity search? Sec States, an easy-to-use database of secretary of state pages, can help. With a few clicks, get easy access to business entity searches across states in a few seconds.