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What is the difference in business plan formats?
The "OBJECTIVES" of the plan is the most important part. Every plan should spell out your goals. Every objective should specify results and activities that can be easily tracked. These may be increasing monthly sales or profits to some specific number or by a specific percentage, decreasing costs or operating expenses to a specific number or percentage, or maintaining cash flow, paying off a loan, or finding a specific amount of new funding.
Objectives don't have to come exclusively from financial results. You can set objectives for performance, customer satisfaction, and other key elements of success, as long as you define how they will be measured. For example, if your business wants to serve the best coffee on the block as a plan objective, then add that it will be determined by a random survey of customers (or by some other measurable means.)
To track outside sales performance, set objectives for numbers of presentations and percent of closes. If you want to increase customer satisfaction, the plan should define how and when the survey will be done and what the main questions will be. You can set objectives for average length of toll-free calls and then measure it on your phone bill. You can set dates for product release and then track whether or not they happen on time. You can set attendance goals for seminars. Just make sure that the objective comes with some measurement you can track later.
To test your objectives, list them and ask yourself, for each one, how you'll know whether or not you've achieved it. That will eliminate a lot of vague and useless objectives. "Being the best" is great, but it isn't a business objective without definition and measurement.
The second most important element is the MISSION statement. A mission statement defines long-term, far reaching goals of a company in three specific ways:
- What does the company do for its customers? What business are you in? Think broadly about the benefits you offer, because that helps you look at the longer term and grow the business. Starbucks, for example. Offers a lot more than coffee and not just products. A certain environment, an affordable luxury or a meeting place.
- What does this company do for its employees? Don't you want our employees to stay with you? Doesn't that mean providing decent work, useful feedback, training, benefits, etc? Isn't that one of the deeper goals of a good company" Put that in your mission statement.
- What do the owners want? Your mission is probably to grow and produce profits, and the mission statement should say so. Profits and growth are very important goals. The mission statement should be more permanent than a topic in a business plan. You need to apply it consistently over time for it to take shape. It should be something that has real meaning when managers refer to it. It should serve as a reminder of what the main point is.
Avoid fussy, vague missions. One good trick is to review your mission statement for useless comparisons, particularly regarding what business you're in and what you do for our customers. Do your competitors do the same thing? Are you missions identical? Think about how your company is different, and use that to influence your long-term mission.
Unfortunately the VISION STATEMENT is often confused with the mission statement. Some people use the two terms interchangeably. Actually, the vision statement is about what the future will look like if the mission is achieved. Some say a vision statement images what success looks like.
Martin Luther King's "I have a dream" speech was a vision statement. Son was John Lennon's song "Imagine." Visions are frequently related to social good, so they tend to be more important for nonprofit and governmental organizations. They inspire leadership.
Do you need all three?
- Objectives and mission statements for any standard business plans
- Vision statements when and if you have one.
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