A plan is just a paper document without an implementation plan, complete with a timeline, defined roles, and key responsibilities.
How to Write a Business Plan: Milestones While the Milestones and Metrics chapter of your business plan may not be extensive, it is critical that you take the time to look ahead and plan the next critical steps for your business. Investors will want to see that you understand what needs to happen to make their plans a reality and that you are working on a realistic timeline. Start with a quick review of your milestones. Milestones are primary planned goals.
For example, if you are producing a medical device, you will have milestones associated with clinical testing and government approval processes. If you are producing a consumer product, you may have milestones associated with prototyping, finding manufacturers, and receiving the first order. While milestones look to the future, you’ll also want to take a look at the top accomplishments you’ve already had. Investors like to call this “traction.” What this means is that your business has shown some evidence of early success. The pull could be some initial sales, a successful pilot program, or a significant partnership. Sharing this proof that your business is more than just an idea, that you have real evidence that it is going to be a success, can be vitally important in getting the money you need to grow your business. In addition to milestones and traction, your business plan should detail the key metrics that you will be watching as your business takes off. Metrics are the numbers that you look at regularly to judge the health of your business. They are the drivers of the growth of your business model and your financial plan.
For example, a restaurant may pay particular attention to the number of table turns they have on an average night and the ratio of beverage sales to food sales. An online software company may consider churn rates (the percentage of customers who cancel) and new subscriptions. Each business will have key metrics that it will watch to monitor growth and detect problems early, and your business plan should detail the key metrics that you will be tracking across your business. Knowing what your assumptions are when starting a business can make the difference between business success and failure.
Finally, your business plan should detail the key assumptions you have made that are important to the success of your business. Another way to think about key assumptions is to think about risk. What risks are you taking with your business? For example, if you don’t have a proven demand for a new product, you are assuming that people will want what you are building. If you rely on online advertising as a major promotional channel, you are making assumptions about the costs of that advertising and the percentage of ad viewers who will actually make a purchase. Knowing what your assumptions are when starting a business can make the difference between business success and failure. When you recognize your assumptions, you can set out to prove that your assumptions are correct. The more you can minimize your assumptions, the more likely your business is to be successful.