The fundamental financial documents for an existing business are the Profit and Loss Statement (Income Statement), Balance Sheet, and Statement of Cash Flows.

Perhaps the most tedious section, the financial projections of a business plan, showcase the expected revenue and performance based on the Action Plan. Performance projections are important no matter what kind of business you are planning for from lawn mowing services to ice cream shops, businesses need goals and plans to meet them if they wish to be successful. The action plan is nearly as simple assign a timeline to the goal of repayment, determine how many yards per week must be mowed, and precisely how the business will market to and sign up the required number of customers to meet the business goal. For such a straightforward business, the math is pretty simple at $10 per yard, he has to mow twenty yards to make back the money he’d owe you. Think of it simply as this: If your neighbor asked to borrow $200 to buy a lawnmower to help him start his neighborhood landscaping business, you’ll want to know when he’ll pay you back and whether his business will make him enough money to pay you back in the promised time. This is really a combination of the “Blueprint” and “Action” plans. #3: A business that is seeking capital (money) to either launch or to growĪs you might have guessed, I call this the “Capital Plan”. Use the “Action Plan” to outline your goals and metrics, define specific daily/weekly actions and how they are expected to meet the goals and metrics, and ultimately compare the goals to actual performance. A system of accountability connects outcomes to daily actions, making it easier for an owner to make smart, nimble decisions about what’s best for business.

Evolving Action Plans allow changes based on outcomes measured at benchmark periods if the expected outcomes for an action do not result, the owner might consider adjusting the plan. Goals are broken down into portions to be achieved over specified periods, to allow for accountability and to verify that the plan is working. These commonly center around increasing sales, entering new markets or identifying acquisition targets, reducing the cost of goods sold, improving production processes, and employee performance improvement, among other considerations. Action Plans can focus on any goals important to the business. By definition, an action plan is a proposed strategy or steps toward an outcome. I call this type of business plan the “Action Plan”. In this case, the focus is less on the feasibility of the business concept and more on the steps to take and metrics to measure that ensures the business meets pre-established projections and goals. #2: An established business or a seasoned plan that is ready for launch The Blueprint provides realistic expectations for a new business owner in the practical form: Startup expenses, licenses and permits required, time management, and profitability all measure against the expectation of sales and success. Separating emotion from business sensibility in the form of measurable plans helps many new entrepreneurs fight their anxieties and stay focused on their goals. One of the most challenging parts of being an entrepreneur is feeling confident in making choices about strategy and direction. The blueprint perspective allows you to see all the pieces needed to assemble your business before you begin. By definition, a blueprint is a drawing up of a plan or model. I call this type of business plan the “Blueprint”. In this scenario, the business plan is essentially a roadmap that specifies the processes necessary to establish your business – defining the actions, tasks, and steps that can be measured to assess progress and success. #1: An entrepreneur with a money-making idea, but not sure where to start Let’s dive into a few of the most common requests for planning that I receive from my clients at the Nevada SBDC, and some important factors to consider. Every business owner has different goals and priorities that drive the purpose of their business plan. Today’s successful entrepreneurs have done yesterday’s hard work: setting goals, designing action plans to reach them, and building plans for growth based on measurable metrics. Perhaps now, more than ever before, the importance of Planning in Small Business is at the forefront of sustainability factors.

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