Five critical questions your business plan should answer

Ask not what you can do for your business plan. Ask instead what your business plan can do for you.

Ask not what you can do for your business plan. Ask instead what your business plan can do for you.

Questions about pricing, hiring and other factors can put you in trouble. A detailed and revised business plan should help you answer these questions. Getting these answers will not only help your company to achieve short-term milestones but will also help you to keep an eye on your long-term business goals.

Here are five key questions and how your business plan should help you answer them:

1. Is my price right?

There are two essential components of pricing that should be included in your business plan:

i. Consider whether your price is in line with your marketing message. If you are offering a high quality product or service, you cannot charge a low price without contradicting your own marketing message. You should set your prices according to the relative value of your offer, or risk confusing your potential market.

ii. Your business plan should include revenues and costs on a per-unit basis, your overall direct costs and overhead. These factors can help you establish the constraints related to making enough profit. You have to cover costs, which can include expenses beyond the direct costs of buying what you sell, such as rent and payroll.

2. Can I afford to hire?

Especially when you are running a new company, you think to hire additional employees as they might help you with the mounting list of tasks that have to get done.
But wait, What would happen if you had hired an extra salesperson? Could an extra administrator solve some of your problems?

Go back to your business plan and determine what happens to projections if you add the extra salary and benefits. Check whether the improvement in people power will add to your revenue, or cut costs.
Instead, you should consider hiring a contract worker. Of course, hiring someone is almost always cheaper but only if there is a long-term need that justifies adding the fixed costs. If it is a short-term need then the cost won’t affect your overheard forever.

3. Am I implementing my strategy?

Test your strategic alignment: Do your milestones, spending for marketing activities, product or service development, and related expenses show the same priorities that are reflected in your strategy?

Generally, business owners say one thing in their strategy but do something different thing in their actions and spending.

For example, assume that you think to emphasize your extensive computer expertise in your strategy. But, you pay your service staff below market rates.

4. Can I afford to relocate?

Sometimes new business owners need to relocate to help cut costs or to take better advantage of a prime sales area. If you need to switch your location, consider prospects like Bevmax NYC office space rentals if they are applicable to your business. Then, get back to your basic numbers and break the problem into its business plan parts.

Estimate how much more your monthly rent will be at the new location. Also estimate your moving costs, costs for fixing up the new location, if applicable, and costs of the business lost while you are absorbed in the move.

Then adjust your sales forecast to either add in the additional business you would be able to do there or the costs you would be able to cut. If you don’t see enough long-term improvement, then perhaps you should not relocate.

5. Am I stunting my own growth?

Go back to your business plan and give your assumptions a fresh look. Consider your target market and strategy, and add in your business offering and distinctive differences.

Does your business offering match your market? Are you sending the right messages to the right kinds of people?
Think about things could easily add on to sell more per customer. Is there are any low-hanging fruit that you are missing?

Now look at marketing. Is your message changing enough to match changes in the market? Is your marketing mix adjusted to technology, media and social changes? What if you spent more money and time on marketing, could you increase sales?

Your business plan is not a static document, it’s your best tool for steering your business. Answering these questions periodically can help you to keep long-term goals in mind while you adjust your immediate steps and actions.

All you ever wanted to know about a business plan

A business plan is necessary even for a small organisation.

According to Wikipedia, a business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them. It may also contain background information about the organization or team attempting to reach those goals.

Business plans may target changes in perception and branding by the customer, client, taxpayer, or larger community. When the existing business is to assume a major change or when planning a new venture, a 3 to 5 year business plan is required, since investors will look for their investment return in that timeframe.

A business plan is necessary even for a small organisation for the following reasons:

• Internal Purposes:

– A structured plan for your business which entails each person’s roles.
– Specified short-term and long-term targets
– It can also serve as a method of evaluation as the entrepreneur can strike off stuff that’s accomplished.
– Helps with the planning process
– Can be edited as the company grows

• External purposes

– To present to banks and other investors for investments
– A document for the statutory agencies
– Helps in attracting business partners
– Attracts key employees

Related Post: How to use a sample business plan to write your own plan



A comprehensive and detailed business plan should consist of the following parts:

• Executive Summary:

The executive summary is not a preface or an abstract but it is a concise version of the business plan itself. It should explain the contents in brief so that the viewers are aware of what’s coming up.

• The Company:

The next part should speak about the company itself. A good business plan should contain your big idea and how it is going to benefit people. Also, any specifications or developments of the product/service should be mentioned in this part.

This part should also speak about the background, current status and the estimated future concisely.

• The management team:

It is essential for the investors or proposed alliances to know about your team. Include the qualifications and the skills possessed by the head and some experienced employees in the team. Including the financial status and the knowledge about the market in this part is also a good idea.

Related Post: Five critical questions your business plan should answer

• The industry & the markets:

This part is self explanatory.

For instance, if you are venturing into the pet market, write about the pet industry and why it is booming. Try and incorporate the psychographics of the market you would be catering to along with the major competitors in the same market.



• Operations

This part of your business plan should comprise of a chart of milestones and dates and also cover inputs required for the business to run. Also, it must take into consideration cash-flow & people related plan.

• The marketing & sales plan

This segment should cover the target market you are aspiring to approach along with the pricing strategies and coverage plan of how you’ll reach them using different marketing tools– social media, personal selling, ATL ads etc.

Include the periodic sales and the collection methods as well.

• Financial plan

This is the most important part of your business plan. It should comprise of the point you will most probably reach a breakeven point (total revenue=total costs incurred). It should have properly structured and supported data about the investments made till now and how much more you’re expecting and how you’d use those financés.

• Risk & Contingencies

This fraction of the plan shows your deep thinking and research done by you and should encompass the financial and other risks one is undertaking.

Related Post: 8 Common business plan mistakes

• Appendices

This is an optional segment but it’s better if you have an appendices. It can consist of CVs of important people, Gantt charts, references, projected profits and losses, cash flow, the balance sheets and important documents such as land acquisition, raw materials etc.

You can find sample business plans here:

http://www.bplans.com/sample_business_plans.php
https://www.liveplan.com/features/samples_and_examples
http://www.smetoolkit.org/smetoolkit/en/content/en/236/Sample-Business-Plans