When people think of business plans, they often think of large, lengthy documents full of flow charts, spreadsheets and phrases such as “our company mission is to <insert flowery speech and corp talk here>. This is often enough to scare a business owner away from even attempting to complete a plan on their own. Combine that with a business not wanting to pay someone else to write the plan, and you end up with a lot of businesses that are basically winging it.
But a business plan doesn’t need to have flowery speech, a bunch of spreadsheets and pie charts to be an effective tool for a business. The point of a business plan is to act as a guide for a business. We’re going to detail why an electrician needs a business plan and how you can write one without wanting to rewire your brain or switch careers out of frustration.
What’s the Point of a Business Plan?
As we stated above, the point of the business plan is to help a business map out their business activities over a period of time. Most plans have a short term and a long-term goal. The short term covers the current year and the long term typically maps out a five-year plan.
The First (or Current) Year
You map out how much money you want to make, how many new clients you want to land, who your competition is and how you plan to compete against them. So if you want to make $100,000 in the current year and gain 100 new clients, you’ll need to figure out where these customers are, how you can reach them and how much you can realistically charge to reach your $100,000 goal. As for your competition, once you know who it is, you can examine what they offer and how much they charge and then draft a plan to compete. For instance, if there’s a niche they aren’t meeting that you can fill, that can be your plan of attack. In other words, the short-term plan forces you to focus on your main goal and find solutions that help you reach those goals.
The Long-Term Goal
The long-term plan for your business is a chance for you to dream a bit about your business. Where do you see the company in two years, three years or five years? How many employees do you want to have? How many customers? How much do you want to be making by your fifth year? Are you planning to add services or expand into other areas of electrical work? Do you have new competitors? How do you intend to compete with them? Once again, this is your opportunity to work through your business and answer specific questions about your business’ long-term plans. Your income projections can come from your financials and adding an increase of a certain percent per year. If you have an accountant, he can complete this portion for you.
Why Make a Fancy Plan?
So basically, your working short-term and long-term plans can be written informally in a notebook. But if you want to pursue additional financing from lenders or other investors, you’ll need to complete a formal business plan. There is business plan software that can walk you through the process; Microsoft Word even has a template for one. You also have the option of hiring a writer to complete the plan for you. Investors will want to see a formal plan before they decide whether or not to invest in your business, so if your long-term dreams may require more capital than you have, getting a formal plan done is a good idea.
Do you have a business plan? Is it formal or informal? Do you follow it?