Business plan is indeed a must-have business document for any kind of business, at any stage – whether a startup or an ailing one. Why? In my opinion, having a business plan is a simple act, an act that writes down your business idea, outlining the business functions and the entire activities so that everyone within your company is well-communicated, going towards the same direction. Most importantly, a rock-solid business plan provides valuable benchmark for on-going progress monitoring as your company moves forward. Isn’t it such a well-constructed hypothesis of mine is applicable to both startup companies and ailing businesses?
A classic example of mine, in 2003, I once wrote a basic business plan myself (that was my very first business plan way before my MBA degree) on a money-losing retail chain store in Pahang state. It was actually a corporate turnaround business plan, I wrote down my idea based on the opportunities observed after three rounds of on-site visits. Something was so fortunate that it didn’t stop me from implementing the plan although I didn’t have a proper business plan writing paper.
No doubt, the vision, the strategies and the financial projections were sound. Eventually, I successfully reformed and revived the dying retail chain business within a year, and the revenue humbly went from thousands to tens of thousands per month per outlet. That said, a rock-solid business plan doesn’t need to be a manicured document to make it a success.
Another good example, in 2014, I wrote a comprehensive master franchise plan on a Korean F&B business (with my MBA degree), for a retail group in Kuala Lumpur. It was a startup, and its master franchise plan required wide-ranging supporting documents, including master franchisee plan, unit franchisee plan, operation manual, central kitchen plan, franchise proposals and so on. Again, the vision, the strategies, the action plans as well as the financial projections (with more than 15 graphical exhibits) were sound. In the end, I successfully created a popular Korean F&B brand in town with consistent monthly revenue that exceeded projections, and most importantly, the business achieved its return on investment (ROI) in less than six months.
In general, your business plan should be straight-forward, providing a clear roadmap for your company to go forward. Without a plan, you’ll find it difficult to communicate your direction, and your vision.
Here are four elements of a rock-solid business plan that I’ve found valuable during my profession:
Element One: Calculations
There is one saying: “Many calculations mean victory; few calculations mean no victory.” A rock-solid business plan needs realistic and comprehensive financial estimations, including Capital Expenditure (CAPEX), Profit & Loss, Master Budgets, Human Resource, Payback, Key Performance Indicator (KPI) and so on. Being realistic is imperative as it gives credibility to support your business plan.
Element Two: Formation
There was one saying in ancient times: “Those skilled in warfare cultivate the Way, and preserve the Law, therefore, they govern victory and defeat.” A rock-solid business plan requires solid implementation by a strong management team with well-matched credentials and expertise. If you don’t have all the skills you need, you can consider adding consultants skilled in your field.
Element Three: Know Earth, Know Heaven
There was one saying in ancient times: “Know thy self, know thy enemy. A thousand battles, a thousand victories.” Understand your competitors is an important part of running a successful business, so defining your unique selling proposition (USP) through valuable competitor intelligence research such as SWOT (Strength, Weaknesses, Opportunities, Threats) analysis will be another milestone to achieve.
Element Four: Planning Attacks
Time is the essence of war, there was one saying in the oldest military treatise in the world: “He who knows when he can fight and when he cannot, will be victorious.” A rock-solid business plan requires strategic and effective actionable plans to achieve its progressive benchmarks. To compete, action plan helps to identify your business goal and strategies that can be implemented to achieve your goals.