Strategy for Success

All businesses, big and small, have a business plan. What concrete steps are you planning to take to turn your idea into a full-fledged business? In order to make informed decisions, every entrepreneur should have a sense of where their business is currently and where it's going. Hustle Crew, in this blog post, we're going to look at how to put together a business plan to steer your

company towards success. 

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Business plans are essentially where a company’s goals and methods to reach them are laid out. They are extremely important to all kinds of companies, from startups to large corporations: potential investors often look to a new company’s business plan in order to gain the necessary information about the company, and business plans help large companies stay on track with their long term objectives. They can look like virtually anything that works for a company’s executives, but they typically follow one of two formats - the traditional business plan and the lean startup business plan. 

First, though, it’s important to note the difference between a business plan and a business strategy. A business strategy focuses more on how a company will create value within their market, and how the company will continue to grow in the long run. It goes through how a company will improve their profit margins and how they can outshine their competitors. On the other hand, a business plan is much more short term, and covers how operations will be done on a short-term basis. Business plans can cover aspects like revenue streams and intended markets, whereas business strategies are more likely to discuss how more customers can be attracted in the next 5 years. The long term goals of your business strategies will likely influence how you put together your business plan. 

Ok, you get the point. Business plans are important. First, let’s dive into the components of a traditional business plan. Traditional business plans are comprehensive, detailed plans that are often extensive in length (typically between 15-20 pages, but it varies heavily from company to company). They are the most common type of business plan, and they are the business plans that are typically requested by investors since they include the most information. Traditional business plans are usually composed of some combination of the following components, although they do not need to contain all of them:

• Executive summary - this includes the product/service offered, as well as the business’s mission statement

• Company description - covers the problem the product/service will address and the company’s beachhead market, or target consumer base

• Market analysis - proves understanding of target market and why you can succeed within it (however that may be)

• Product or service line - explains how the offered product/service benefits customers 

• Organization and management - covers the structure and legal aspects of the company, as well as key team members

• Marketing and sales - discusses how target customers will be attracted to the product or service, and an estimate or target number of sales

• Financial projections - includes things such as costs and profit margins, and often a prospective financial outlook

• Funding request - if asking for funding, how much and what it will go towards

• An appendix including supportive or miscellaneous documents 

Now let’s take a look at the lean startup business plan. These are typically only a page or so, and can be made in as little as an hour or so. While they contain significantly less detail, they are ideal for individuals who prefer to get many ideas down at once or who know their business plan will be changed regularly. 

One common visualization of the lean startup plan is the business model canvas, shown below:

Source: Reshuka Jain - Medium

Similar to traditional business plans, it contains about nine components that are organized all in one place:

• Value proposition - explains the unique value that company brings to the market

• Key partnerships - discusses outside operations and services needed to sustain the business

• Key activities - unique things that give your business a competitive advantage

• Key resources - assets and resources used to help run business and create additional value. Some examples of key resources can include high-tech equipment or non-tangible things, such as quality of employees

• Customer relationships - covers the customer’s experience and how they can interact with the product/service

• Customer segments - your beachhead market(s)! 

• Channels - the platform through which customers will use your product/service. Can be a physical location, an online marketplace, etc.

• Cost structure - includes general costs associated with the business 

• Revenue streams - what brings in cash from your product/service. You can definitely have multiple revenue streams (for instance subscriptions AND advertisements)

But remember, your business plan doesn’t have to strictly follow one of these two models or include every element mentioned previously - your business plan should work for you. There is no “ideal length” or "perfect format" - use however many pages you think you need to get the amount of information you and your team need to have in one place. And don't forget, your business plan can be adjusted at any time whenever you feel a change in direction or detail is needed.

That's all for this blog post, Hustle Crew - stay tuned for the next entry, featuring advice on how to get your business through its early rounds of funding!

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About the Author

Brandon Yeh is an entrepreneur and student who currently resides in Northern California. In addition to working on his latest business ventures, he enjoys playing golf competitively and is an avid Bay Area sports fan.