7 Critical Topics for Your Hands-on Business Plan

business plan basics

Isn’t it sad that so many eager wannabe small business owners end up stuffing their business plans in the top drawer of an old desk? Or never even bother to write a business plan?

I have a hunch that this happens a lot because the very idea of writing a business plan seems daunting, or because an overly formal document gets produced that turns out to be of little practical use.

First, let me say that I’m not telling you to blow off writing a business plan. They’re important, and in fact, I’m on record recommending that you refer to and update them often.

If you’re going after funding from outside sources, every element of your business plan needs to be fully fleshed out and communicated. But, no matter where your funding is coming from, every budding small business owner needs to create a business plan that deals with all of the day-to-day items that are required to open the doors and keep the doors open.

That’s what we’re going to focus on here: A practical small business plan that covers the following topics:

  1. Location and facilities. Choosing the wrong location can lead to a quick failure or a slow and agonizing death for your small business. Do all the research necessary to find a location where you can be successful. Be careful and get good advice when you negotiate your lease. Do you need warehouse space or a will you use a fulfillment service?
  2. Organization and personnel. Will you be hiring immediately? Take time to understand who will be reporting to whom, if they don’t all directly report to you. If your business will be open for longer hours than you plan on working each day, at least one employee is going to have to be given more responsibility than some others. Be sure to have good job descriptions. Further, you need at least a bare-bones employee handbook that outlines your workplace policies and employee benefits.
  3. Equipment, processes, and systems. What equipment will you need and what systems and processes do you need to put in place to give you “repeatability”? These vary widely. The requirements of a manufacturer will be different than those of a retailer. However, the retailer can’t slack off and think that employees will know how to handle situations without any documents and training to guide them. You also need processes in place to handle the financial side of your business, including accounts receivable and accounts payable. This leads us to the topic of computer systems. What software will power your business? Be sure to do your homework here because committing to a bad system can cause huge headaches and costs down the line.
  4. Sales and marketing. How are you going to get the word out about your new business? You’ll need to think about your startup period as well as how you will sustain your marketing, advertising, and selling.
  5. Inventory. This category cuts across several topics. It is important from a financial point of view because your inventory is a major cost that also has tax implications. Efficient inventory control can greatly enhance your chances at success. How you handle your inventory will also impact your facilities and the processes you put in place.
  6. Fulfillment. How to handle distribution and shipping is a critical question for any small business that sells physical products, especially B2B companies. However, even if you’re a local retailer you need to consider whether or not you’ll have an e-commerce component to your business. If you do, then you need to deal with fulfillment.
  7. Customer service and quality control. What is your returns policy? How are they handled? Who will deal with irate customers and how will these employees be trained? For any business selling products, you must have a good quality control system in place before you start shipping to your customers. Your business plan needs to define quality control responsibilities and processes. Even a service-based small business needs to implement quality control measures.

These seven general topics or business areas are the ones you need to address to pull together a practical, hands-on business plan. Some of these areas will be critical to some business while some will be incidental. Just be sure that you understand them and have your plans well developed.