At KCARD, we understand how intimidating starting a business plan for the first time can be. Whether you’re starting a new business or creating/updating a plan for an existing business, there can be a lot of questions about the process of writing a business plan. Why do I need a business plan? Where do I start? What elements of the business plan are most important? How can I make my business plan stronger?
Good news—we’ve already answered the first two questions for you! Check out a previous post about why you should think about business planning the next rainy day and our Business Plan Development Guide is a great place to start.
While we do believe all information in the business plan is useful, there are three elements that we often encourage businesses to research further and expand upon.
1. Have defined goals and understand how you’ll measure the success of the business. It’s important to make sure you have SMART goals: specific, measurable, achievable, realistic, and timely (check out this video we recently shared on SMART goals). Your goals should be separated into short-term and long-term goals. The subject of these goals will be specific to the business but generally relates to the growth of the business in terms of sales, profit, number of employees, infrastructure additions, expanding market channels, etc. Setting SMART goals will also help you set some performance measures in place to understand how successful the business is compared to your expectations.
2. Understand who your target customers are and what influences them. A business idea is purposeless without someone willing to pay for your product/service. Understanding who you expect your customers to be will determine your marketing strategy, sales tactics, and any future product additions (other key parts of the business plan). Think about key details of your targeted groups, what their needs are, and what factors will be most important to them.
3. Know what your expenses are and understand where your prices and sales need to be to make a profit. Since many agricultural businesses start out as passion projects or family farms, profitability may not always be the first consideration when thinking about a business plan. It’s definitely important to be passionate, but you should also understand the financials because ultimately, that will determine the sustainability of the business. Key questions are: How much does it cost to produce one unit based on input and labor costs? Considering your expenses, what do your sales numbers and prices need to be in order to make a profit? Is that price point and volume realistic for your business?
If you’d like assistance developing or reviewing a business plan, reach out to us at (859) 550-3972 or kcard@kcard.info and we’d be happy to help you!