Writing a formal business plan is an important step for any new venture. This document is meant to outline everything from the founding team to your financial projections and target customer base.
No two business plans will be exactly alike, but there are a few important items that every plan should have, regardless of industry. We asked a panel of Forbes Coaches Council members what critical element is often missing from first-time founders’ business plans. Based on their answers, here are 13 things you shouldn’t overlook in yours.
Members of Forbes Coaches Council share their insight. All images courtesy of Forbes Councils members.
1. Customer Churn, Consolidation And Degradation
Most business plans typically look to the up-side of business growth. However, customer churn and degradation is a fact of life. The market will likely shrink, or consolidation will play its part to erode your revenues also. Expect to go backward, say, 10%, every 12 months. Plan for this gap — “standing still” is going backward. Perform a PEST analysis every year at a minimum. – Antonio Garrido, Absolute Sales Development
2. A Sizable Marketing Budget
With the onset of social media, we often think it is cheaper to market our product or service than it truly is. Many first-time founders simply don’t include enough money in their marketing budget because they think their social media efforts are enough. – Donald Hatter, Donald Hatter Inc.
3. Hiring Staff
Many first-time founders are so passionate about starting their businesses or organization, they fail to realize they can’t do it alone. Rather than include sufficient money in their budget and business plan for recruiting and hiring staff, they wear too many hats and get burned out. In business, it is critical to assemble a team, even if it’s comprised of part-timers or contractors initially. – Lori A. Manns, Quality Media Consultant Group
4. Your Exit Strategy
Many founders consider their businesses as their babies and forget that once it grows, it may need to transform. Start with the end in mind and consider the exit strategy. In the event a surprise acquisition offer or merger presents itself, you will be ready to take the next step and possibly receive equity payments. – LaKisha Greenwade, Lucki Fit LLC
5. An Operating Reserve For Emergency Funding
First-time entrepreneurs can often be so convinced of the inevitable success of their idea, they do not set aside capital for emergencies or pivots for challenges that include seasonality of a product or changes to costs for raw materials from a supplier. They build their financial models based on optimal market conditions, instead of accounting for these potential shifts. – Billy Williams, Archegos
6. Your Customer Experience Strategy
Business plans typically explore how to get customers, but then often neglect how to provide the best experience to keep them. The best companies include a customer journey map, consider touch points around when things go wrong, when a customer leaves, and potential points of delight. It could be the difference between a company thriving instead of just surviving! – Jeannie Walters, 360Connext
7. Your Ideal Customer
New founders have passion and ambition. These are positive attributes, but they can get in the way if the business plan has not clearly defined the ideal customer and ideal customer segments. Ambitious founders can lose their way by trying to serve too many customer segments. Broadening the target market seems right in the beginning, but in the end, can lead to financial pains. – Chuck Gulledge, Chuck Gulledge Advisors
8. Your Human Resources Plan
The success of a newly-founded organization is probably dependent more on people than any other singular item. A solid HR strategic plan must be built from the business plan that addresses how the entity will attract, motivate and retain the talent needed to grow the organization into a sustainable entity. This includes the owner surrounding themselves with people they can trust and rely on. – Ed Krow, Turbo Execs, LLC
9. A Plan For Scaling
Most of my clients are first-time founders. Standard business plan templates are startup-driven with arbitrary financial projections that don’t require a concrete plan for growth to reach them. In real life, founders need a plan for reaching the growth projected in the business plan such as collaborating, outsourcing, building credibility and automating processes. – Tamiko Cuellar, Pursue Your Purpose LLC
10. Front-End Time Commitment For Sales And Marketing
Building a business plan is difficult. Recognizing the time commitment for creating a sales and marketing plan and learning to sell is a new adventure in learning. Finessing the balance of time and energy needed to research and build the resources to deliver your services and products is a skill unto itself. Research and reach out for accuracy and always plan time to meet with your mentor. – Gayle Draper, Intentional Careers and Human Resources
11. The Context Of Your Business Solution
Many first-time entrepreneurs are understandably so excited about their creation that they forget to talk about the problem that their creation solves. Every product or service was created to solve a problem. So, when pitching the idea, entrepreneurs must be sure to put the creation in the context of the problem being solved. – Steven Maranville, Maranville Enterprises
12. Contingencies For Dealing With Stress And Conflict
In the overwhelming majority of first-time founders, they neglect to include in the business plan a structure and plan for dealing with stresses and conflict. These will occur, and in the calm of drafting a business plan, you should include contingencies and processes for dealing with mental stresses and the inevitable conflict that will arise. – Tyron Giuliani, Selling Made Social
13. Your Core Values
Founders most commonly forget to identify their core company values. Frequently, they place more value on crafting a mission statement they believe their audience wants to hear versus identifying and committing to what they want their company to stand for. Committing to core values in one’s business plan provides a roadmap to creating a corporate culture that will foster integrity and success. – Linda Zander, Super Sized Success
This article originally appeared on Forbes.com.