Having discussed the importance of an executive summary and company’s background in the previous weeks, this week we will shed light on the section of the business plan that elucidates a company’s mission statement, vision, goals and objectives. The following helps one comprehend how this section serves as that single most essential ingredient that can help you prepare the perfect recipe for success.
A business plan does not only outline specific details about your idea, it can be thought of a resume for your proposed business. A business plan actually serves as a calling card and is inevitable to create a strong first impression on investors you are meeting.
A business plan does not only give an entrepreneur a direction and purpose, it also helps him/her to create a layout as to how he plans to see his business go about the development stage. Stating the business objectives in great detail, a business plan is endeavored at formulating a strategy for business growth and the way one plans to achieve the desired outcomes.
All in all, a business plan provides a basis for detailed planning and emerges as a framework acutely focused at winning support and approval of the concerned parties. While entrepreneurs realize the extent to which a business plan can influence the decision of a venture capitalist, sadly they often fail to explain the business to others in a way that convinces readers into getting motivated and involved.
With the vitality of an executive summary and company background already discussed in detail, we move on to the next building block of the business plan, the vision and mission statement. Despite its grave significance, this is one section where an otherwise attention-grabbing proposal turns into an annoying piece of literature that seems to drag on forever.
Taking into consideration that an investor uses his perception of your business and the prospects it has to offer as a basis for his decision-making, his understanding of where an entrepreneur and his company are heading is the thin line that demarcates success from failure.
Investors are not only concerned with whether or not you will be able to capture the desired demographic, he also takes into consideration the goals and objectives you have set, a company’s mission statement and its vision for the future. This is where the particular section of the business plan comes into the picture that helps an investor to assess the chances an entrepreneur has at success.
As far as goals and objectives are concerned, they are the most important part. An entrepreneur should outline his goals, specify results and should summarize the activities that will get things in the swing. Goals and objectives are viewed by venture capitalists as a means to judge the nature of those heading the company. This enables the concerned parties to make well-informed decisions by evaluating whether or not those heading the company are realistic or just dreamers.
Next comes the mission statement. Stating the long term goals of the company, a well-defined mission statement should be crafted impeccably while ensuring that nothing important has been left out. While en route to preparing a company’s mission statements, questions that must be effectively answered and addressed are briefly listed below.
What makes a mission statement even more important than the company’s goals and objectives is that goals and objectives may change over time but a company’s mission statement should be applied consistently. Therefore, it is strongly recommended not to use any vague sentences. Also, one should not forget to specify what makes a company different and better than the rest.
Quantitative measurement of goals should be a part of the mission statement. Break down the long-term goals into short-term goals and outcomes that are measurable. This is because it can be difficult for people to visualize how you plan to accomplish the goals.
Last but not the least comes the vision statement. Despite the fact that the mission and vision statements are used interchangeably, there is a difference between the two. Vision statement is a description of what the future of the company will be if it fulfills its mission. This gives investors an idea about the values the company will operate with as well as a feel of what the company will be like. Since one has to develop these for the long-term, a lot of thought and effort should go into it.
On a final note, do not underestimate the importance of this section as it effectively adds value and substance to a business plan.