Uncertain Economic Times Make Having A Solid Plan Even More Vital To Success, Says Jeff Nock Iowa
Business plans have always been necessary for planning, raising money, and gauging the success of the venture. Companies that develop business plans succeed more often than those who don’t, saysJeff Nock Iowa. The economic uncertainty of COVID-19 has made a strong business plan even more critical to profitability and long-term growth. Startups need solid plans, and companies that have existing plans also will want to rework them based on changing market conditions, says Jeff Nock Iowa.
Business plans include several components. These include an executive summary/description of the business, detailed information on the market and competitive environment, how this business will differentiate itself within that environment, what are the financial goals and milestones, and how the business will be operated. The plan also should include how the company is responding or will respond to shifts in demand, such as toward more e-commerce, and remote working that are part of the current business environment, says Jeff Nock Iowa.
In creating or rewriting a business plan, a company should consider carefully who the audience for the plan will be; for example, is the plan to seek funding or a joint venture partner or is it primarily for giving internal direction. The audience will drive the content, says Jeff Nock Iowa.
Jeff Nock Iowa offers the following tips to develop a solid first business plan or to adjust one for the current context.
- Survey customers. What do they most want and need now? Has the virus changed their needs for your product?
- Consider competitors. What services and products are they offering to meet customer wants and needs? What gaps exist? How can you provide a better product or service or deliver it differently?
- Understand the market. Will the demand for the product and service continue to grow, and how will the market change as it grows? How would the company change as the market changes?
- Develop a sales forecast. Next, determine how to get there based on the current economic environment. For example, suppose an entrepreneur needs to make 100 sales and one-quarter of the leads turn into sales presentations, and half of all presentations result in sales. The company would need 800 leads to sell 100 products. The company then plans on how to obtain 800 leads.
- Develop Scenarios and how the company will adapt to them. For example, a business that a state government has deemed nonessential might adjust by adding an “essential product” to its line or by collaborating with a company that has been considered essential.
- Plan cash flow carefully. Monthly cash flow projections will be vital to ensuring the company can meet obligations. If the sales cycle is long, the plan should include how the business will meet obligations in the meantime.
- Select a strong management team. Every good business plan includes a discussion of the management team and the team members’ backgrounds. The description might include examples of how members have creatively responded to other significant economic changes and their ability to find creative solutions.
Jeff Nock Iowa is the founder and CEO of Prescient Consulting LLC, which has helped more than 250 companies develop and execute effective business plans. Jeff Nock Iowa has considerable experience in managing non-profit and not-for-profit organizations, including President & CEO of Goodwill of the Heartland, CEO of EPX Denver, and AVP of Marketing and Product Development at ACT. Jeff Nock Iowa also has been part of three tech startups.