The Business Element is a snapshot of your present situation; the current condition of your organization. This activity requires that you have completed a substantial amount of your market research, and that you understand your business well enough to write a description of your concept.
Three Vital Business Planning Benefits
Three highly beneficial things will occur when you write your business plan.
- The writing will begin to shape the business. After scrawling out the rough draft and then referring to it later to make revisions, you will find you can identify weaknesses and pick out the holes in your description and in your thought process.
- The process of writing will help you to identify and set goals. Incomplete tasks or missing information may indicate a need to research further.
- You will find that you are able to communicate your business idea more clearly to others.
The Business Element has the following five segments:
- Identity Statement
- Mission Statement
- Vision Statement
- Description of the Business
- Legal and Regulatory
As you set out to write the 5 segments of this Step, understand the following:
- Each segment is intended to be brief.
- Although each segment ends up being brief, you may agonize somewhat to get it that way.
- As the Business Element is a snapshot of your business, it necessarily touches many aspects of your business. For example, the couple words you use in this Step to describe your customers will be much expanded in the Profile of Customers you develop in Step 38.
- The act of finding the right words and keeping these segments brief – forces you to clarify your thoughts on your business.
- Don’t worry too much at this point if you find you’re too wordy, you can revise as you become more familiar with the rest of the business plan.
1. Identity Statement
Your identity statement should be simple and factual, and it must communicate the answers to the following questions:
- What is the name of your company?
- What is the legal form or structure of your business?
- Where is the business headquartered, licensed, and registered?
- When did or when will your business start?
- What is the nature of your business (home-based, retail, services, or products)?
- What is the scope of your business (local, regional, national, international, or global)?
- What Industry is your business in?
View the Example: Identity Statement
Action
- Using the questions and examples above as a guide, write your identity statement (70 words or less) and enter it into the working copy of your business plan.
2. Mission Statement
Your mission statement should be clear and factual and it must communicate the answers to these questions:
- What business are you in?
- What product(s) or service(s) do you provide?
- Who are your customers?
- What is your competitive advantage?
View the Example: Mission Statement
Action
- Using the questions and examples as a guide, write your mission statement (20 words or less) and enter it into the working copy of your business plan.
3. Vision Statement
Your vision statement should be succinct and it must communicate the answers these questions:
- What kind of company do you want to be?
- How do you wish to be viewed by the individuals and communities you serve?
- How will you treat your customers, both internal and external?
View the Example: Vision Statement
Action
- Using the questions and example above as a guide, write your vision statement (20 words or less) and enter it into the working copy of your business plan.
4. Description of the Business
Your description of the business should communicate the answers to these main points and questions:
- Briefly describe your customers.
- Describe your office.
- Describe any other facilities (plant, warehouse, storefront, or field operations).
- Describe your method of operation. Do you create products or purchase them from suppliers? Do you go to your customers, or do they come to you?
- What equipment do you own or have to buy?
- What are the outstanding characteristics (price, quality, selection, etc.) of your business?
View the Example: Description of the Business
Action
- Using the key points and examples above as a guide, develop a description of your business and enter it into the working copy of your business plan.
5. Legal and Regulatory
Keeping your reader in mind, this topic should cover any important legal and regulatory considerations. Answer the following questions:
- Have you checked the zoning for your location to ensure that it is appropriate for your business?
- Have you researched the taxation requirements and taken the necessary action?
- Have you researched the Workers’ Compensation Board requirements and taken the necessary action?
- Which other regulatory agencies will affect your business, and what action have you taken for each?
- Write out your contact information; this includes your street address, mailing address, Internet address, email address, telephone number, cell phone number, fax number, etc. If you’re using a computer, this information should go into your header or footer.
View the Example: Legal and Regulatory
Action
- Using the questions and example as a guide, write your legal and regulatory segment and enter it into the working copy of your business plan.
Putting Your Business Concept Together
Your Business Element consists of the five segments you’ve now completed: Identity Statement, Mission Statement, Vision Statement, Description of the Business, and Legal and Regulatory. If you have completed each of the segments separately and now have five separate parts of The Business Element, it’s now time to bring them all together to create a cohesive snapshot of your business.
View the Example: The Business
Action
The narrative from this step will form part of the Business Concept section of your final business plan. In your working copy of the Shell™ enter the following information under the heading Business Concept, section 2.1 The Business.
- Your next task is to write a draft copy of your Business Element, using the following process:
- Get a blank sheet of paper or a clean page in the digital working copy of your business plan.
- Write the name of your business at the top of the page.
- Ink or copy in your Identity Statement.
- Insert your Mission Statement.
- Enter your Vision Statement.
- Write or copy in your Description of the Business.
- Enter your Legal and Regulatory segment.
- Read it aloud to yourself or have someone read it to you.
- Revise until it accurately communicates your message.
Summary
One of the greatest benefits of creating a business plan is that you can use the information in various ways to operate your business. The information in this Element can be useful for:
- Creating marketing materials (business cards and brochures).
- Assembling sales letters and other communication tools.
- Copying to other Elements of your business plan to serve as starting points.
- Repurposing to become part of the Executive Summary.
- Communicating with employees.
- Developing proposals.