4 Essential Elements for Business Success

Let's face it, the competition is fierce in any industry. A company's success or failure is a reflection of the strength or weakness of the team behind it. To succeed, small businesses must focus on four key elements: product, market, money and plan. By analyzing activities within these four elements, you can gain a better understanding of the big picture and make more informed decisions.

Whether your business plan is five or thirty pages long, an executive summary should be included to summarize all the material in two pages. This section is important because it may be the only part of the plan that readers look at when deciding whether to move forward or not. As an old proverb goes: “You can judge the quality of a business plan by its executive summary.” The executive summary should be more than just a summary; it should be a call to action. In the first paragraph, include a description of your business and the customer problem that you have uniquely solved so that readers understand what you are trying to achieve.

Additionally, include your marketing budget and sales forecast which will be used in the financial forecasts in the financial plan section. The financial statements are one of the final elements of your business plan and should appear last since they are a summary of everything that precedes them. Financial statements are graphs with lots of numbers and few words that describe what they are about. To make them easier to understand, include an introductory page that explains in plain English the key assumptions and how each was determined.

Basic information is also an important element of any business plan. It should include a summary of the company's ownership structure, resumes of owners and management, company history and information about the product. This section will be shorter for a new one-person company and more extensive for an existing company with several employees but with the same purpose. The marketing plan is at the center of your business plan and covers every aspect of marketing, not just media ads.

It should include product positioning, packaging and pricing, as well as distribution and target customers. Additionally, it should address how you will handle competition by distinguishing yourself from similar companies. The marketing plan should also anticipate changes in marketing techniques over time due to product or service modifications, technological innovations or changes in competition. The financial plan is a very important section and should include two to five years of historical financial results for existing companies and five years of data for future projections.

It should include a balance sheet, income statement and statement of cash flows as well as financing and repayment schedules for debt. Your projections should be as accurate as possible but will require estimates. At GoSmallBiz, we have been helping small business owners turn their dreams into reality since 1996. A business plan is developed from the bottom up so you need to analyze all details before writing the summary. Specific marketing actions are developed in your marketing action plan which is used to implement your business idea. With limited track records and few assets, success often depends on the owner's ability to execute their vision. To create a successful business plan, you must first define each of the four elements and how they apply to your business.

A successful business plan shows that your concept is solid and that you have what it takes to organize and launch your business. The activities within each element may vary from one company to another but they remain constant. In this post, I'll help you understand which components are most important and what to include in each section. The product and services, marketing, operations and personnel sections demonstrate that your business idea is feasible but it's the financial section that shows it's viable. While you only need to focus on key components of a business plan, it's helpful to know what a complete business plan looks like.

Developing one takes time and effort but will pay off in the long run by helping you anticipate problems and set realistic expectations.