How to Write A Purposeful Business Plan
That feels good for the long term
Any organization starting out or planning an expansion needs a business plan. Often, business plans feel like a painful experience – the stress of digging into the details, worrying if investors will like your idea, wondering if you will be able to execute on the plan as well as you imagine it – in the end, you’re not even sure if what ends up in the document resembles your vision anymore. And does anybody even read it?
Still, there is a reason you are taking the leap to embark on this new business venture. You know you have an idea for a product or service that will give your customers the desired state they long for. It feels powerful and impactful to you and your business. Your business just has to make this happen for your customers, your employees, your visionary leaders, and for society in general. To begin the process to create value for the long-term, your company needs a business plan.
Why write a business plan?
Business plans are important for clarifying the purpose of your business, attracting the right investment to achieve your goals, and meaningfully communicating your vision to the people who are responsible for delivering on the plan. Business plans are generally required for organizations seeking external financing as well as companies who have capital available internally and want to pursue a new business opportunity. A business plan describes the business venture’s roadmap to success.
A business plan generally includes the following sections:
Executive Summary – Summarizes the key points of the plan .
Business Description – An overview of the product or services provided, purpose of the product/services, and future goals of the product/services.
Goals and Objectives – A description of SMART goals.
Marketing Plan – Identification and description of your industry and market.
Operating Plan – Summarizes the process required to provide the product or service.
Financing Requirements – Outlines the funding required for assets and working capital.
Financial Plan – A summary of the projected financial statements and related financial ratios for a 3-5-year period.
Business Risk Analysis – Identification of potential risks to achieving the goals of the business, the potential impact on financial projections, and possible mitigation strategies for each risk.
Summary – Summary of findings and next steps.
Appendix – More detailed information to support the statements made in the body of the business plan.
Each section of a business plan requires research, evaluation of alternatives, documentation of all relevant information, a clear description of the key learnings/outcomes, and impact on strategy. It must be understood by the audience. Most importantly, the business plan must clearly outline why you are taking on this business venture – why it matters to your industry, your customers, your leaders, your employees, your investors, and the greater social good.
Why write a purposeful business plan?
Purpose is a feeling – an extra level of engagement with your goals that propels customers, employees, and investors to want to work with your business to enhance the greater good in some way. Communicating your business venture’s purpose is critical for gaining support from those who make investment decisions and will motivate your organization’s governance, leadership, and employees to make good on the promises made in the plan.
Planning is essential to the success of a business venture. Obtaining the financing required to begin or expand a business can be a challenge. Even after obtaining the necessary financing, there are challenges to running a business – the key challenges being economic uncertainty, adapting to customer preference, and managing cash flow. Having a plan in place to manage these risks and capitalize on the opportunities they provide conveys understanding of your business environment and increases the confidence of investors in your business.
That said, business plans can often feel prescriptive and restrictive. We are reminded too often, once we start the work of the plan we encounter circumstances requiring temporary or permanent diversion from the plan in order to meet our goals or even just to stay in business. A specific, clearly articulated, understood, and agreed upon purpose statement allows for flexibility in how to deliver on the plan while meeting the expectations of the plan. Vague purpose statements leave room for many interpretations of purpose and can result in confusion and large deviations from the plan. This can be confusing for employees, customers, and, especially, investors, and reduce plan’s likelihood of success.
The process of developing a business plan can help you clarify the purpose of your business. Throughout the development of your business plan continually ask “Why does this new business or new business direction matter? What is our reason for being?” The research you conduct to support your idea will provide opportunities for you to learn more about your business, your market, and different operational models for delivering on your plan. This is an opportunity to evaluate what feels right for your business and clarify the key objectives that determine success.
How to make your business plan purposeful.
A business that infuses its purpose into everything it does feels meaningful and important to the lives it impacts. It attracts only those investors, employees, and customers who resonate with why your business is needed. It simplifies the need for various strategies while allowing for new opportunities to effectually serve the organization’s purpose. And it clearly communicates what is needed for the organization to live out its purpose.
To make your business plan purposeful and engaging to your readers, tell the story of your “why” in all aspects of the business plan:
Why serve your customers?
Tell the story, with specific examples, of who your customer is, what their goals are, what they’ve tried that hasn’t worked, and how your business will help them get where they want to be.Who are you creating this product or service for? Why do they need you? What is your organization’s unique way of improving the lives of your customers? How do your customers feel before and after they work with your organization?
Why does your organization’s leadership want to be in this business?
Tell the story of how your leadership – including the Board – personifies the company’s purpose. Give examples of why this business feels good to the leadership.Why do your leaders care? How will your leaders stay conscious of and attentive to the company’s purpose – including its goals, the key aspects that make the company unique, how well employees understand and identify with the company’s purpose, and how financial investments in operations contribute to fulfilling the company’s purpose.
Why would employees want to work for your company and carry out this purpose?
Tell the story of the ideal employees who work for the organization, what their work environment is like, and how it feels to work for the company.What are the most important characteristics of the people you need to attract who align with your company’s purpose? What does a typical day look and feel like for an employee at your company? How are teams and organizational systems designed to motivate and support your employees to work together effectively and successfully deliver on their work?
Why is it important for your operating plan to align with your purpose?
Tell the story of what you provide and the experience of how you provide it.What is the right scale to deliver on your purpose? Are we investing the right amount into the aspects of the business that are key to creating the value promised by the business? How is your company’s operating plan in integrity with its purpose?
Why would your investors would want to invest in your business?
Tell the story of your ideal investor, how you and your investor will work together to fulfill the company’s purpose, and how your business can help them fulfill their purpose.What does your business provide to your investors that aligns with their purpose? What is your company’s financial and non-financial goals? How does your business serve the greater social good? Why would investing in your business for the long term feel good ?
Business plans are an essential step in a successful business venture. A purposeful business plan deepens your company’s engagement with its stakeholders and communicates the long-term value of your business. Create your purposeful business plan and let it be your guide to a powerful and impactful business that enhances the lives of your customers and feels good for the long term.
Karri Howlett Consulting provides customized trusted advisory services to support your organization as you prepare aligned, powerful, and purposeful business plans. With over 20 years of experience working with and leading organizations creating new businesses or business expansions, or embarking on ownership transition, Karri Howlett, CFA, C.Dir. provides governance, strategy, and financial expertise to support and enhance your business.