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What Is a Business Plan?
Understanding business plans, how to write a business plan, elements of a business plan, special considerations.
- Business Plan FAQs
Business Plan: What It Is, What's Included, and How To Write One
Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.
Investopedia / Ryan Oakley
A business plan is a document that defines in detail a company's objectives and how it plans to achieve its goals. A business plan lays out a written road map for the firm from marketing , financial, and operational standpoints. Both startups and established companies use business plans.
A business plan is an important document aimed at a company's external and internal audiences. For instance, a business plan is used to attract investment before a company has established a proven track record. It can also help to secure lending from financial institutions.
Furthermore, a business plan can serve to keep a company's executive team on the same page about strategic action items and on target for meeting established goals.
Although they're especially useful for new businesses, every company should have a business plan. Ideally, the plan is reviewed and updated periodically to reflect goals that have been met or have changed. Sometimes, a new business plan is created for an established business that has decided to move in a new direction.
- A business plan is a document describing a company's core business activities and how it plans to achieve its goals.
- Startup companies use business plans to get off the ground and attract outside investors.
- A business plan can also be used as an internal guide to keep an executive team focused on and working toward short- and long-term objectives.
- Businesses may create a lengthier traditional business plan or a shorter lean startup business plan.
- Good business plans should include an executive summary and sections on products and services, marketing strategy and analysis, financial planning, and a budget.
Want Funding? You Need a Business Plan
A business plan is a fundamental document that any new business should have in place prior to beginning operations. Indeed, banks and venture capital firms often require a viable business plan before considering whether they'll provide capital to new businesses.
Operating without a business plan usually is not a good idea. In fact, very few companies are able to last very long without one. There are benefits to creating (and sticking to) a good business plan. These include being able to think through ideas before investing too much money in them and working through potential obstacles to success.
A good business plan should outline all the projected costs and possible pitfalls of each decision a company makes. Business plans, even among competitors in the same industry, are rarely identical. However, they can have the same basic elements, such as an executive summary of the business and detailed descriptions of its operations, products and services, and financial projections. A plan also states how the business intends to achieve its goals.
While it's a good idea to give as much detail as possible, it's also important that a plan be concise to keep a reader's attention to the end.
A well-considered and well-written business plan can be of enormous value to a company. While there are templates that you can use to write a business plan, try to avoid producing a generic result. The plan should include an overview and, if possible, details of the industry of which the business will be a part. It should explain how the business will distinguish itself from its competitors.
Start with the essential structure: an executive summary, company description, market analysis, product or service description, marketing strategy, financial projections, and appendix (which include documents and data that support the main sections). These sections or elements of a business plan are outlined below.
When you write your business plan, you don’t have to strictly follow a particular business plan outline or template. Use only those sections that make the most sense for your particular business and its needs.
Traditional business plans use some combination of the sections below. Your plan might also include any funding requests you're making. Regardless, try to keep the main body of your plan to around 15-25 pages.
The length of a business plan varies greatly from business to business. Consider fitting the basic information into a 15- to 25-page document. Then, other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and included as appendices.
As mentioned above, no two business plans are the same. Nonetheless, they tend to have the same elements. Below are some of the common and key parts of a business plan.
- Executive summary: This section outlines the company and includes the mission statement along with any information about the company's leadership, employees, operations, and location.
- Products and services: Here, the company can outline the products and services it will offer, and may also include pricing, product lifespan, and benefits to the consumer. Other factors that may go into this section include production and manufacturing processes, any patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
- Market analysis: A firm needs a good handle on its industry as well as its target market. This section of the plan will detail a company's competition and how the company fits in the industry, along with its relative strengths and weaknesses. It will also describe the expected consumer demand for a company's products or services and how easy or difficult it may be to grab market share from incumbents.
- Marketing strategy: This section describes how the company will attract and keep its customer base and how it intends to reach the consumer. A clear distribution channel must be outlined. The section also spells out advertising and marketing campaign plans and the types of media those campaigns will use.
- Financial planning: This section should include a company's financial planning and projections. Financial statements, balance sheets, and other financial information may be included for established businesses. New businesses will include targets and estimates for the first few years plus a description of potential investors.
- Budget: Every company needs to have a budget in place. This section should include costs related to staffing, development, manufacturing, marketing, and any other expenses related to the business.
Unique Business Plans Help
The best business plans aren't generic ones created from easily accessed templates. A company should entice readers with a plan that demonstrates its singularity and potential for success.
Types of Business Plans
Business plans help companies identify their objectives and remain on track to meet goals. They can help companies start, manage themselves, and grow once up and running. They also act as a means to attract lenders and investors.
Although there is no right or wrong business plan, they can fall into two different categories—traditional or lean startup. According to the Small Business Administration (SBA) , the traditional business plan is the most common. It contains a lot of detail in each section. These tend to be longer than the lean startup plan and require more work.
Lean startup business plans, on the other hand, use an abbreviated structure that highlights key elements. These business plans aren't as common in the business world because they're short—as short as one page—and lack detail. If a company uses this kind of plan, it should be prepared to provide more detail if an investor or lender requests it.
A complete business plan must include a set of financial projections for the business. These forward-looking financial statements are often called pro-forma financial statements or simply the " pro-formas ." They include an overall budget, current and projected financing needs, a market analysis, and the company's marketing strategy.
Other Considerations for a Business Plan
A major reason for a business plan is to give owners a clear picture of objectives, goals, resources, potential costs, and drawbacks of certain business decisions. A business plan should help them modify their structures before implementing their ideas. It also allows owners to project the type of financing required to get their businesses up and running.
If there are any especially interesting aspects of the business, they should be highlighted and used to attract financing, if needed. For example, Tesla Motors' electric car business essentially began only as a business plan.
Importantly, a business plan shouldn't be a static document. As a business grows and changes, so too should the business plan. An annual review of the company and its plan allows an entrepreneur or group of owners to update the plan, based on successes, setbacks, and other new information. It provides an opportunity to size up the plan's ability to help the company grow.
Think of the business plan as a living document that evolves with your business.
A business plan is a document created by a company that describes the company's goals, operations, industry standing, marketing objectives, and financial projections. The information it contains can be a helpful guide in running the company. What's more, it can be a valuable tool to attract investors and obtain financing from financial institutions.
Why Do Business Plans Fail?
Even if you have a good business plan, your company can still fail, especially if you do not stick to the plan! Having strong leadership with a focus on the plan is always a good strategy. Even when following the plan, if you had poor assumptions going into your projections, you can be caught with cash flow shortages and out-of-control budgets. Markets and the economy can also change. Without flexibility built into your business plan, you may be unable to pivot to a new course as needed.
What Does a Lean Startup Business Plan Include?
The lean startup business plan is an option when a company prefers a quick explanation of its business. The company may feel that it doesn't have a lot of information to provide since it's just getting started.
Sections can include: a value proposition, a company's major activities and advantages, resources such as staff, intellectual property, and capital, a list of partnerships, customer segments, and revenue sources.
Small Business Administration. " Write Your Business Plan ."
- Business Development: Basic Overview of Activities 1 of 46
- Business Ethics: Definition, Principles, Why They're Important 2 of 46
- Business Plan: What It Is, What's Included, and How To Write One 3 of 46
- Organizational Structure for Companies With Examples and Benefits 4 of 46
- Which Type of Organization Is Best For Your Business? 5 of 46
- What Are the Major Types of Businesses in the Private Sector? 6 of 46
- Corporate Culture Definition, Characteristics, and Importance 7 of 46
- What Is an S Corp? 8 of 46
- LLC vs. Incorporation: Which Should I Choose? 9 of 46
- Private Company: What It Is, Types, and Pros and Cons 10 of 46
- Sole Proprietorship: What It Is, Pros & Cons, Examples, Differences From an LLC 11 of 46
- Bootstrapping Definition, Strategies, and Pros/Cons 12 of 46
- Crowdfunding: What It Is, How It Works, Popular Websites 13 of 46
- Seed Capital: What It Is, How It Works, Example 14 of 46
- Venture Capital: What Is VC and How Does It Work? 15 of 46
- Startup Capital Definition, Types, and Risks 16 of 46
- Capital Funding: Definition, How It Works, and 2 Primary Methods 17 of 46
- Series Funding: A, B, and C 18 of 46
- Small Business Administration (SBA): Definition and What It Does 19 of 46
- Upper Management: What it is, How it Works 20 of 46
- What is the C Suite?: Meaning and Positions Defined 21 of 46
- Chief Executive Officer (CEO): What They Do vs. Other Chief Roles 22 of 46
- Operations Management: Understanding and Using It 23 of 46
- Human Resource Planning (HRP) Meaning, Process, and Examples 24 of 46
- Brand: Types of Brands and How to Create a Successful Brand Identity 25 of 46
- What Is Brand Personality? How It Works and Examples 26 of 46
- What Is Brand Management? Requirements, How It Works, and Example 27 of 46
- What Is Brand Awareness? Definition, How It Works, and Strategies 28 of 46
- Brand Loyalty: What It Is, and How to Build It 29 of 46
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- Affiliate Marketer: Definition, Examples, and How to Get Started 32 of 46
- What Is Commercialization, Plus the Product Roll-Out Process 33 of 46
- Digital Marketing Overview: Types, Challenges, and Required Skills 34 of 46
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- 7.1 Clarifying Your Vision, Mission, and Goals
- 1.1 Entrepreneurship Today
- 1.2 Entrepreneurial Vision and Goals
- 1.3 The Entrepreneurial Mindset
- Review Questions
- Discussion Questions
- Case Questions
- Suggested Resources
- 2.1 Overview of the Entrepreneurial Journey
- 2.2 The Process of Becoming an Entrepreneur
- 2.3 Entrepreneurial Pathways
- 2.4 Frameworks to Inform Your Entrepreneurial Path
- 3.1 Ethical and Legal Issues in Entrepreneurship
- 3.2 Corporate Social Responsibility and Social Entrepreneurship
- 3.3 Developing a Workplace Culture of Ethical Excellence and Accountability
- 4.1 Tools for Creativity and Innovation
- 4.2 Creativity, Innovation, and Invention: How They Differ
- 4.3 Developing Ideas, Innovations, and Inventions
- 5.1 Entrepreneurial Opportunity
- 5.2 Researching Potential Business Opportunities
- 5.3 Competitive Analysis
- 6.1 Problem Solving to Find Entrepreneurial Solutions
- 6.2 Creative Problem-Solving Process
- 6.3 Design Thinking
- 6.4 Lean Processes
- 7.2 Sharing Your Entrepreneurial Story
- 7.3 Developing Pitches for Various Audiences and Goals
- 7.4 Protecting Your Idea and Polishing the Pitch through Feedback
- 7.5 Reality Check: Contests and Competitions
- 8.1 Entrepreneurial Marketing and the Marketing Mix
- 8.2 Market Research, Market Opportunity Recognition, and Target Market
- 8.3 Marketing Techniques and Tools for Entrepreneurs
- 8.4 Entrepreneurial Branding
- 8.5 Marketing Strategy and the Marketing Plan
- 8.6 Sales and Customer Service
- 9.1 Overview of Entrepreneurial Finance and Accounting Strategies
- 9.2 Special Funding Strategies
- 9.3 Accounting Basics for Entrepreneurs
- 9.4 Developing Startup Financial Statements and Projections
- 10.1 Launching the Imperfect Business: Lean Startup
- 10.2 Why Early Failure Can Lead to Success Later
- 10.3 The Challenging Truth about Business Ownership
- 10.4 Managing, Following, and Adjusting the Initial Plan
- 10.5 Growth: Signs, Pains, and Cautions
- 11.1 Avoiding the “Field of Dreams” Approach
- 11.2 Designing the Business Model
- 11.3 Conducting a Feasibility Analysis
- 11.4 The Business Plan
- 12.1 Building and Connecting to Networks
- 12.2 Building the Entrepreneurial Dream Team
- 12.3 Designing a Startup Operational Plan
- 13.1 Business Structures: Overview of Legal and Tax Considerations
- 13.2 Corporations
- 13.3 Partnerships and Joint Ventures
- 13.4 Limited Liability Companies
- 13.5 Sole Proprietorships
- 13.6 Additional Considerations: Capital Acquisition, Business Domicile, and Technology
- 13.7 Mitigating and Managing Risks
- 14.1 Types of Resources
- 14.2 Using the PEST Framework to Assess Resource Needs
- 14.3 Managing Resources over the Venture Life Cycle
- 15.1 Launching Your Venture
- 15.2 Making Difficult Business Decisions in Response to Challenges
- 15.3 Seeking Help or Support
- 15.4 Now What? Serving as a Mentor, Consultant, or Champion
- 15.5 Reflections: Documenting the Journey
- A | Suggested Resources
Portions of the material in this section are based on original work by Mark Poepsel and produced with support from the Rebus Community. The original is freely available under the terms of the CC BY 4.0 license at https://press.rebus.community/media-innovation-and-entrepreneurship/.
By the end of this section, you will be able to:
- Clarify the vision statement, mission statement, and goals for your enterprise
- Define and develop a problem-solution narrative that is compelling
- Define and develop a value proposition that is credible and appealing to customers and investors
Entrepreneurs can sometimes be compared to superheroes: They solve problems. They wield great power and responsibility. They’re willing to take on risks the way superheroes are willing to take on villains. They are undaunted in the face of failure. They seek solutions and continuous improvement of their products with their customers in mind so that their solutions go beyond addressing their individual needs. When an entrepreneur succeeds, others say “If only I’d thought of that!”
But thinking isn’t enough. And even doing isn’t enough. Successful entrepreneurs also understand the need to communicate the origin and value of their venture. They not only solve problems, they tell stories of crises averted, foes bested, and painful defeats from which they learned how to start anew. After all, what’s a hero without an origin story and a list of tales, battles lost, and markets won?
In superhero narratives, these origin stories are sacred lore. For an entrepreneur, a problem-solution narrative is like the origin story for their offering. The problem-solution narrative concisely introduces a specific problem that affects many people and presents the good or service as an innovative, unique, and insightful solution. Here are some classic problem-solution narratives in advertising and in corporate origin stories to think about as you consider how to craft a quick, compelling problem-solution narrative.
- A young basketball player lacks muscle mass. The athlete drinks milk and gets stronger, earning the a place on the school team.
- Young people, pictured in silhouette, walk around a city looking bored with life. Then, they turn on their new MP3 players and start dancing in the streets. Their world is set ablaze in color and sound.
- A hardworking ballerina lands the lead in a school performance, only to have it canceled as a result of the 2020 pandemic. Family and friends order lights and stage a rendition on the street.
These may not be the greatest stories ever told. You’re not going to get a National Book Award for a Snickers commercial, but these are memorable narratives about people who have a problem that the product in question can solve.
To stay focused through repeated series of successes and failures, you need more than a problem-solution narrative: You need a vision and, in turn, a mission statement and goals. You learned about these in The Entrepreneurial Perspective , but you should revisit them as you develop your story and refine how to pitch that story to potential investors, customers, and employees. A pitch is a formal presentation in which you ask for something. It is delivered (usually) to potential investors in a startup. More on pitches later in the chapter.
Sara Minkara’s vision statement may be defined as wishing to live in a world where visually impaired people are not discriminated against. Her venture’s mission is to establish a well-functioning nonprofit organization showing people in the United States, the Middle East, and North Africa the humanity and value in those with severely impaired eyesight. Minkara’s vision , imagining the organization’s long-term future, is to make it a global leader in providing services to visually impaired people. Specific goals include hosting events, developing educational programs, organizing awareness campaigns, and, of course, fundraising. Following this example of mission, vision, and goals, let’s break down each concept and consider how they work broadly and apply to your potential venture.
A vision statement , as you saw in The Entrepreneurial Perspective , outlines the venture’s broader purpose, what the entrepreneur sees the venture growing into in the future. Before you can create a focused mission statement and goals answering who you are, what you do, and what you plan to do in the future, you must develop a vision statement that allows you look into the future to answer this question: “What might we become someday if our organization were the best possible version of itself?”
Drafting a vision statement is an exercise in ideation —a purposeful process of opening up one’s mind to new trains of thought that branch out in many directions from a stated purpose or problem—in this case, with the goal of generating new possibilities for goods, services, or processes to make your venture sucessful. A vision statement is more open-ended than a mission statement. For example, Table 7.1 shows Amazon’s vision and mission statements. Notice how they differ.
To create a strong vision statement, look at the broader field in which your organization operates. Be general. State a dream that is not currently attainable but that defines what your collective outcomes would be in a best-case scenario. Crafting a vision statement enables your organization, as a team, to identify key areas for potential growth and key social influences you can have, but it is important to stay focused on changes in your industry or sector as a general rule of thumb and to revisit your vision when those may warrant a change. For example, Netflix started out with the goal of providing optimum value and convenience for customers renting DVDs but as entertainment consumption platforms evolved it needed to adjust, and it has since shifted into streaming content for television. The company’s 2019 vision statement is “Becoming the best global entertainment distribution service.” 3
When crafting a vision statement, write questions beginning with, “How might we…?” or statements starting with, “In a perfect world, our organization would…” Craft a vision statement that hinges on the organization’s service goals and turns it into a lasting social good. (You should not promise to create world peace or give everybody a puppy, but you should look at how businesses operate in your field and dream of doing better strategically and socially.) These steps provide a good starting point:
- State how your organization would function in a dream scenario.
- Connect your organization’s dreams to broader hopes for progress.
- Define how you’re going to make the world a better place in the future through your products and services.
Dreams do not have to be wild to be broadly appealing or influential. The purpose of the vision statement is not to set unattainable goals but to open minds in the organization. If the vision statement has no grounding in reality, it can easily be written off; if it focuses on market share and product development (that is, tangible, mission-oriented things), the point is lost. Imagine your best team doing its best work with future capabilities and affordances made possible by other entrepreneurs and creators like you, and then state clearly what your influence as world changers could be. Again, the goal is not to develop unmanageable expectations or demand constant innovation from employees and contributors who have jobs that sustain day-to-day operations. The purpose is to develop a conversation about what is possible for the enterprise. For smaller startup enterprises (a deli or coffee shop, for example), the vision can be simpler but still focused on a unique experience they want to create for their customers. In other words, it should still be aspirational, with a link to the mission statement. Table 7.2 lists the vision statements of some companies across a variety of industries.
A vision statement does not have to be long to be strong. One well-known vision statement contains only fifteen words: “At IKEA our vision is to create a better everyday life for the many people.” 4 This vision statement focuses on what IKEA hopes to accomplish, and what its employees can aspire to be—people who make everyday life better for others. Note the phrase “the many people.” This is purposeful: IKEA makes mass-marketed products and chooses to align its vision with its targeted consumers: many people. This vision statement is not framed as a political statement; rather, it is an ideal established for the global brand, and it indicates a broad positive outcome. IKEA’s statement is almost pure vision. A vision statement should connect an organization’s day-to-day work to a universal ideal rather than trying to draw a roadmap for implementation.
That being said, alongside its vision, the company follows up with what IKEA calls its “business idea.” It states: “Our business idea is ‘to offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.’” This is something of a value proposition and a mission statement wrapped up in one. A value proposition explains what it is, exactly, that an organization or firm does that people will pay for (or contribute, to in the case of a nonprofit), and it is a central point in any pitch. We learned about value propositions in Identifying Entrepreneurial Opportunity as being integral to identifying opportunities, and you will learn how they figure into your business model in Business Model and Plan . But the discussion in this chapter is about how and why the value proposition needs to be articulated.
An example of a complicated vision statement is Coca-Cola ’s. 5 While they are a very successful company, in the vision and mission statements published on their website, the distinctions between each can be difficult to discern. Figure 7.2 shows a large collection of statements and comments titled “Mission, Vision, & Values” on Coca-Cola’s website that includes sections on workplace culture, market focus, and “working smart.” These concepts, taken together, cover most of what is discussed in this section. Coca-Cola is not committing sins of omission with its “Mission, Vision, & Values” page. If anything, it tries to say too much. Also at issue is how these ideas are stated. For a company with massive global reach and some of the best, most memorable marketing moments, the relatively lifeless nature of its vision stands out.
This is a classic case of telling rather than showing . IKEA and Coca-Cola arguably have a similar vision. They want to make life a little bit better for people in an everyday way. But with this series of statements, Coca-Cola tries to cover all possible types of vision for almost every major relationship or facet of the corporation imaginable. Coca-Cola has a separate mission statement on its website, shown in Figure 7.3 .
While this is shared as a mission statement, it reads like a vision statement. The value proposition is relegated to an afterthought in convoluted corporate-speak. This is all tied into a vague “2020 Vision,” which is not truly a vision statement but appears more like a wrapper for the “Mission, Vision, & Values” content. 6 It is not clear what leadership, employees, business partners, or consumers are supposed to do with this information.
Coca-Cola is one of the world’s most recognizable brands. The company can grow by creating new products and by recapturing market share from competitors. It is essential, if and when Coca-Cola revises these statements, that it succinctly speak to all of those groups with one voice rather than trying to address each independently.
Are You Ready?
Can you help coca-cola rework its “2020 vision”.
Can you revise Coca-Cola’s vision statement so that it more clearly states how the corporation can be a force for good in the world? Read Coca-Cola’s “Mission, Vision, and Values” page then draft a new vision statement that alludes to hopes and potential accomplishments in the context of broad, positive, future outcomes for everyone the corporation comes into contact with.
Crafting a vision statement for an entrepreneurial endeavor is different from redrafting Coca-Cola’s vision statement. A startup is in the process of defining itself, which can make it challenging to establish a far-off vision, but crafting and adhering to a vision statement can remind leaders and employees what they are capable of and what their market is all about, so it is an important step. A good vision statement is sufficiently broad to allow for your organization to move within its marketplace while still aiming to do some good in the world.
In the chapter’s opening vignette, you learned about a young woman seeking to battle social injustice. Minkara ’s mission was self-evident. It followed her experience facing prejudice in society. Other entrepreneurial missions may not be as personal or altruistic, but they can still be a force that drives passionate solution seeking. As we saw with Minkara, entrepreneurs often develop a product or service idea through a difficult or frustrating experience, whether a social injustice or a consumer frustration.
An entrepreneurial mission is a business or nonprofit organization’s reason for being. It is expressed as a self-conceptualization in the context of a marketplace and includes a sense of action. In considering a venture’s mission, relevant questions are: Who are we? What do we make or do? Why do we exist as an enterprise in the first place? Steve Jobs and Steve Wozniak , cofounders of Apple , had a mission to put personal computing in the hands of everyday consumers, which meant they had to create simple tools (a graphic user interface, mouse, and so on) in parallel with hardware.
A well-developed sense of mission establishes what an organization is and what it seeks to become. Even nonprofit organizations exist in marketplaces. They have to compete for resources and define themselves by the services they provide. Establishing a clear mission helps a nonprofit organization seek funding. It helps entrepreneurs in the for-profit world explain to investors, to customers, and to employees why their “thing,” whatever it is, is worth doing.
For example, the American Red Cross , one of the oldest and most well-known relief organization in the United States, has a very specific mission statement: “The American Red Cross prevents and alleviates human suffering in the face of emergencies by mobilizing the power of volunteers and the generosity of donors.” 7 Defining an organization’s mission clearly and specifically is essential for success.
A mission statement , as you read in the chapter on Identifying Entrepreneurial Opportunity is a clear expression of an organization’s reason for being that defines its primary long-term goal and often includes an abbreviated plan of action for how to reach that goal. A mission statement is written by answering these questions:
- Who are we?
- What do we make or do?
- Why do we exist as an enterprise?
Developing an effective mission statement and adhering to it puts members of an organization on the same page, and it communicates to potential partners and consumers that your organization knows where it is going. Mission statements can be revised, but it’s best to get it right at the start. A strong mission statement helps stakeholders prioritize the entity’s action steps and should guide decisions.
Link to Learning
This Ted Talk from Simon Sinek is entitled “How Great Leaders Inspire Action.” Sinek is the author of two books: Start with Why and Leaders Eat Last .
When it comes to crafting an effective mission statement, clarity is key: It must be specific. What is left out of a mission statement is often as important as what is kept in. A good mission statement is focused, direct, and honest about the marketplace in question as well as the organization’s capabilities. It strikes the right balance between practicality and hope. For example, Patagonia , a well-known outdoor apparel company, has a compelling mission statement: “Patagonia: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”
Check out this article on HubSpot about what makes an effective mission statement and tips on how to write them to learn more.
An inadequate mission statement might say this: “At Toys Inc., we make the best wooden toys money can buy, and our mission is to continue to grow to be a market leader in the classic toy industry.” A better mission statement might say this: “Toys Inc. is a market leader in North American wooden toy manufacturing. It is our mission to lead the global market in wooden puzzle and wooden toy car manufacturing and to serve customers with fresh versions of classic toys.” Both mission statements leave room for growth, but the second one defines more precisely what the organization is and where it is headed in the long term.
A mission statement should refrain from using clichés since these constrain the specific and unique vision of the venture. It should not limit innovation or creativity, and it should reference consumers or clients.
To create a strong mission statement, start by defining what the organization is. Even in a startup, you have a core problem-solution and an idea of what the product—and therefore the brand—will be. Be specific when defining your organization’s reason for being without limiting your avenues for growth. Include or embed the service mission within the broader mission. Again, the mission statement needs to do the following things with a tone of optimism:
- Define who you are.
- Define what you do now and for whom.
- Define what you want to do in the future.
In a startup, the mission may change substantially in the early phases. Mission statements should not be crafted in a way that limits an organization’s ability to pivot—that is, to adjust the value proposition to better achieve product-market fit (see the Launch for Growth to Success for a more in-depth discussion of pivoting). And while they should not be impervious to change, revise the mission statement only when it is necessary and helpful to do so. Companies and organizations usually change their mission statement when they have made a major shift (due to an acquisition, pivot to another market, new growth strategy, etc.) or if their purpose has changed in a major way.
For example, the March of Dimes organization was originally founded to serve people afflicted by polio, but with the success of polio vaccinations, the disease was eradicated in the United States. As a result, the March of Dimes changed its mission to focus on preventing birth defects, premature birth, and infant mortality. 8 In another example, Slack , a venture-backed startup that went public in mid-2019, was founded as a way for online game developers to collaborate. The original venture failed (twice), but the founder noticed that his engineers used the tool for rapid collaboration and did not need email or other functions of Microsoft Windows. Slack quickly communicated this change in a simple mission statement: “Slack is where work flows. It’s where the people you need, the information you share, and the tools you use come together to get things done.” 9
One thing should be clear: It is not the purpose of an organization to come up with better mission and vision statements. The purpose of an organization is to provide value to people and try to get paid or supported in doing so. The point of crafting mission and vision statements is to assist you to that end. Essentially, your vision statement is your dream, and your mission statement is your strategy in a real-world marketplace. The vision is a statement about why you matter as an organization with a view of what the organization will become in the future, while the mission is a statement about those who might be served by the venture. Refining these statements will help you clarify your entrepreneurial story.
An organization needs to establish concrete goals for its products and services to remain viable. Goals should be stated in precise terms that are appropriate for the marketplace. For example, a new “white table” Italian restaurant in Chicago needs an initial goal on how it will attract and retain new customers based on its vision and mission, relative to what is already available. A new company’s initial goal is probably not to crush all competition and take over a monopoly position. Instead, it may hope to capture a percentage of a close competitor’s market share or create a new product to reach a niche market. In those instances, goals would be stated as specific outcomes to attract competitors’ customers, or in the case of a niche business (like Spanx ), to define a new category of women’s comfort apparel. Lululemon Athletica , which pioneered customer-centered designs for women’s athletic apparel, recently established new growth goals that were consistent with its mission: “Management is hard set on growing the company to $4 billion in revenue by 2020. This involves growing historically small contributors to the top line, such as men’s, international, and the digital business.” 10
Goals can be tactical in the short term too. They should be reasonable, influenced by a detailed understanding of the marketplace and the competition, and attainable. Nothing stunts growth and clouds the path to achieving your vision more quickly than setting unattainable goals and holding members of an organization to impossible standards. Instead, set SMART goals , which you first were introduced to in The Entrepreneurial Perspective . SMART stands for specific, measurable, achievable, relevant, and timely. The best goals clearly communicate all of these elements, as shown in Figure 7.4 .
To break these down, SMART goals should be:
- Specific: Your goals should be precise rather than overly broad.
- Measurable: You should be able to test, in some quantifiable manner, whether a goal has been met, meaning that there needs to be some method to determine whether the goal has been met.
- Achievable: The goal must be attainable; it cannot be so lofty that it cannot be accomplished. On the other hand, the goal should not be so easy that it can be accomplished quickly or with little effort.
- Relevant: The goal should be well suited for what you want to accomplish; this means that the goal should be relevant to the outcome needed.
- Timely: Each goal needs to have a defined deadline: the time when the goal must be accomplished. What time frame do you have for completing your goals? How does this timeline fit into your overall plan?
Is it a reasonable goal for a specialty soap company to strive to capture 1.5 percent of the global market share two years after incorporating? Let’s deconstruct the goal to assess how SMART it is. It is specific because it establishes a clearly targeted amount (1.5 percent) of a defined market (global specialty soaps). Market share is measurable . We can assume that this is an attainable goal for our imaginary startup. Is it relevant? Capturing market share is always relevant because it translates to near-term earnings and potential for future earnings at the same time. The goal as stated is also timely (within two years). Thus, this is a SMART goal.
Check out the University of Virginia’s detailed exercise on writing SMART goals to learn more. It includes one example of a SMART goal, and, for each letter, it includes an explanation of how the concept is applied. Follow the link to write your own SMART goal and analyze it using a helpful questionnaire. 11
SMART goals are not guarantees of success. As an entrepreneur, you could be wrong about whether a goal is attainable, for example. Or you may fail at measuring outcomes correctly, and your idea may not be as well defined or unique as you thought. Nevertheless, it is much better to set goals with all of these factors in mind than to practice wishful thinking or set abstract goals and hope to reach business benchmarks by luck.
What Can You Do?
Smart goals for social activism.
You can use SMART goal-setting methods to plan a peaceful social demonstration. Mobilizing people to speak out about an issue that they want political leaders to address is one of the most basic tasks social entrepreneurs undertake. Social entrepreneurs who go on to found successful nonprofit organizations often cut their teeth in this kind of base-level activism. But just because the concepts underlying demonstrating are somewhat straightforward—contact media, gather people, march, demonstrate, speak out, tell your story, clearly state your petition for change (also known as a “redress of grievances”), peacefully disperse, and strategize next steps—that does not mean that the process is always done according to SMART tactics. Protest organizers often vary immensely in their organizing skills.
Here is the task: Think of an issue that you want addressed on your campus or in your community. Define it and draft a plan for a peaceful demonstration wherein the demonstration is clearly goal-oriented.
- State the specific issue you want addressed, who you want to address it, and what you want them to do.
- State several ways you might measure the success of your protest. Are you seeking media awareness, legislative change, or specific action regarding an individual victim or perpetrator of a crime? Be sure to clearly state not only reasonable expectations regarding reactions to your demonstration but also measurable outcomes you can communicate to others as you work to gather interest in your cause.
- Note whether your demands target the right leaders and whether what you ask of them is something you can attain.
- Demonstrate clearly how the specific action you plan to take is relevant to the cause at hand. Will you demonstrate in one place? Will you carry out some form of active protest such as a “die-in” at a certain location? 12 Will you practice nonviolent civil disobedience? Clearly explain why your action is relevant to your requests or demands. If you are planning an act of peaceful civil disobedience, are you and everyone you are encouraging to participate aware of the possible consequences, such as arrest? If someone is risking arrest to help demonstrate for an important cause, they are right to demand of protest organizers that the action be relevant and easy for target audiences to understand.
- Is your strategy timely? Are you planning a demonstration with measurable outcomes that will occur according to a timeframe you can track? It is generally ill-advised to petition for general fixes to complex solutions without paying attention to existing legislative and/or communicative cycles.
Note that this is presented as an exercise only. Much more planning goes into successful demonstrations, but this should give you a sense of how SMART goal setting can be useful for social entrepreneurship. It is not only for taking business risks. You can use SMART tactics to peacefully push for important changes. Recognize, obviously, that the risks are quite different for this type of social entrepreneurship than for other types of endeavors.
Thinking like a business entrepreneur again, recognize that SMART goal setting is a tactic for getting things done in the short term. You can line up several attainable goals over a period of several weeks or months, and build your way to a complex, realistic business plan. The Small Business Administration (SBA) business plan template, 13 for example, includes eleven core sections and, as a blank outline, is thirty-five pages long. If you set a SMART goal to complete each section in about a week, in three months, you would have a comprehensive business plan.
- 2 “Amazon Mission and Vision Statement Analysis.” Mission Statement Academy . June 19, 2019. https://mission-statement.com/amazon/
- 3 “Netflix Mission and Vision Statement Analysis.” Mission Statement Academy. July 12, 2019. https://mission-statement.com/netflix/
- 4 “Vision and Business Idea.” IKEA . n.d. https://www.ikea.com/gb/en/this-is-ikea/about-us/vision-and-business-idea-pub9cd02291
- 5 “Mission, Vision, and Values.” The Coca-Cola Company . n.d. http://www.coca-colacompany.com/our-company/mission-vision-values
- 6 “Mission, Vision, and Values.” The Coca-Cola Company . n.d. http://www.coca-colacompany.com/our-company/mission-vision-values
- 7 “Mission and Values.” American Red Cross . n.d. https://www.redcross.org/about-us/who-we-are/mission-and-values.html
- 8 Kelly Medwick. “Why, When and How to Change Your Mission Statement.” Firespring . February 13, 2018. https://blog.firespring.com/why-when-and-how-to-change-your-mission-statement/
- 9 “Slack Integration.” FounderHub. n.d. https://founderhub.io/integrations/slack
- 10 John Ballard. “Lululemon Athletica Pushes Forward With Ambitious Goals for 2020.” The Motley Fool. December 17, 2017. https://www.fool.com/investing/2017/12/10/lululemon-athletica-pushes-forward-with-ambitious.aspx
- 11 “Performance Management Goal Setting.” University of Virginia . n.d. https://hr.virginia.edu/career-development/performance-management-process/performance-management-resources/goals
- 12 Tamar Harris. “Road Safety Advocates to Hold ‘Die-in’ at City Hall.” The Star. March 25, 2018. https://www.thestar.com/news/gta/2018/03/25/road-safety-activists-to-hold-die-in-at-city-hall.html
- 13 US Small Business Administration. “US Small Business Administration 8(a) Business Plan.” March 31, 2014. https://www.sba.gov/sites/default/files/SBA%201010C.pdf
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What CEOs Get Wrong About Vision and How to Get It Right
Many executives don’t understand how to craft a compelling vision for change that will gain widespread commitment within their organizations. Leaders should start by asking themselves: What will people see, hear, and feel once the changes have been achieved?
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- Executing Strategy
When a leader must implement a new strategy, especially one that requires new systems, processes, and perhaps people, it is the start of a new era. Success requires more than the right combination of capital and technology; it also requires a critical mass of employees to adopt new behaviors and ways of thinking. But too often, CEOs and boards in these situations think through the capital and technology issues much more carefully than those involving behavior and attitudes. That imbalance is a primary reason new strategies fail. And, in addition to disrupting a company, failure can derail a promising executive career — especially if a CEO took over to guide the company in a new direction.
When new behavior and new ways of thinking are required, an essential step is for the CEO, the board, and key managers to have an image in their minds of what the organization will look and act like after achieving its strategic goals. Just as great athletes are guided by a mental picture of the perfect jump shot or golf swing, key players in the organization need a consistent picture in their minds of what success will look like. That’s where a vision comes in.
The term “vision” is used often in business; companies frequently talk about “our mission, vision, and values.” The trouble is that most of the time, the word “vision” is used incorrectly. When CEOs say they’ve defined their company’s vision, I ask them to explain it to me. Many respond with something like, “Our vision is to be the most innovative, agile company in our industry.” To which I reply, “That’s a mission, not a vision.”
In cases like these, the so-called vision merely repeats what is already in the strategy, and, worse, does nothing to emotionally engage the people who are being asked to implement it. A leader’s vision — particularly if that leader needs to bring about significant change in the organization — should start as a vivid, credible image of an ideal future state. The clearer a CEO is about what people should do differently to achieve new, challenging objectives, the greater his or her chances of achieving the changes necessary for success. New behavior doesn’t come from missions, however aspirational, but from deep, emotional commitment to doing things differently.
In reality, leaders who need their organizations to change don’t have many options to gain emotional commitment to the new path. One way is through a logical argument. Lay out the rationale for why change is necessary, describe the sequence of steps that need to be taken, and show how other companies in similar situations have improved their performance. A second way is to describe a “burning platform” that highlights the dangers of not changing. The message is that if performance doesn’t improve, the fire will spread, and many jobs will be lost.
While both approaches will help a CEO make some progress, they won’t be enough to change behavior and attitudes. Logical arguments are forms of education that fill gaps in knowledge; but, more than knowledge, new behavior requires passion to build something new and the determination to stick with it. The thought of a burning platform does cause people to behave differently, but only as long as the threat exists. Once the fire goes out, most will return to comfortable habits.
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Both approaches involve telling people what to do and only asking them to listen patiently. But to be successful, the leader needs to do more than that: She must enlist the organization’s most influential managers so they roll up their sleeves and become committed enough to new ways of operating to cause changes both in their behavior and that of the people they influence.
The most effective way to engage these key executives is to communicate a vision — a vivid, detailed, and inspiring description of what will be seen, heard, and felt when the company has implemented the needed changes. Anything that doesn’t meet this standard is not a vision. The most influential managers must agree on a shared, common picture of behaviors, systems, and processes needed to make the new strategy successful — in other words, a picture of the way the organization will operate when at its best.
This vision must start with the leader’s personal mental image. Once a draft of that picture is clear enough in his mind, he must communicate it in a way that not only excites the most influential managers about the possibilities, but also enables them to form their own consistent mental picture of what they will do and cause to happen when the company is at its best. Also, CEOs must ensure that they bring their boards along as the vision becomes clearer.
Clarifying Your Vision
The following five principles will help guide a leader with a new strategy to make sure that the key people who are necessary to successfully implement it are operating from the same idea of what success will look like. The upshot should be a common vision of what will be seen, heard, and felt when necessary improvements are in place.
1. Find your own unique way. There is no simple, generic way to craft a real vision, one that is a powerful asset for change. It must be tailored to the character of the company, must be described in the leader’s own words, and must reflect the leader’s personality. No one should question whether it represents the CEO’s true and thoughtful ideas for the organization’s future.
I remember one leader, a former journalist, whose board asked for a written description of the sort of place he wanted his company to become. The lead director complimented the CEO by saying, “It was so clear that I could taste it. I can’t wait for that place. Everyone in the company should understand this.” But, because this CEO disliked giving speeches to large groups, his way of getting employees behind his vision was adapting that white paper for the board into a series of “editorials.” He sent them out monthly to every manager, who then passed them down within their organizations.
Another leader introduced his vision at a January meeting of his top 200 managers. Before the holidays, he had a short story written about a hero (his company) battling an unscrupulous villain (the industry leader) and then shared the story with his managers. For the meeting in January, the CEO hired an actor to play the part of the hero. About halfway through the actor’s speech, the managers began to recognize their connection to the story, and a ripple of awareness turned into waves of laughter. Through this creative method, the leader proved that a vision can be fun — and, more important, got the attention of every manager.
While not quite as elaborate, each example I have seen of successfully formulating and communicating a vision was unique to the personality of the leader as well as to the organization’s culture. For this reason, when the task of communicating a vision is delegated to a marketing department or PR organization, the only outcomes are a sterile statement and lost credibility for the leader.
2. Appeal to emotions often and vividly. As important as anything else, a description of the optimal organization must paint a picture that people are drawn to because it strikes them as more satisfying than today’s environment — in particular, as a place where their needs for achievement, affiliation, and control can be met.
The best vision is vivid enough that people understand how the organization would operate and how problems that currently frustrate them would be solved. As the vision is put forward often and in various forums, a picture takes shape in the minds of followers of a place in which they can envision themselves being more satisfied. The result is that they personalize the vision, tailor it to their own needs, and, as they experiment with new behavior, become more comfortable with it.
To achieve this, the leader’s vision must not only be vividly clear, but it must also appeal to emotions as well as logic. It can’t just be a vision of success in financial terms; financial objectives won’t create the needed emotional attachment.
3. Describe changes that can be imagined. For the leader seeking to implement a new strategy, a carefully crafted vision is the best way to acknowledge the extent of the changes that will be necessary, particularly when those changes affect popular, long-standing practices. No one is happy to give up habits and ways of operating that have worked for them and that feel comfortable. Usually, people will accept the need to change behaviors gradually, after being involved to some degree in determining the specifics of new practices. The leader’s vision can help get to that point by walking a fine line. While the vision must honestly communicate a different reality, its descriptions should not be so radically different from employees’ current concept of the organization that they are not able to imagine what the organization will look and feel like once the vision is achieved.
4. Describe valued behavior, not values. In describing the vision, the leader should distinguish between core humanistic values and the behavior that will be valued in order for the organization to successfully change.
Most companies state what they call their “values” alongside their missions. Usually, there are three problems with this. First, most of the items on these lists are not values but rather broad areas where operational improvement must be made (common ones are “innovation,” “customer focus,” and “teamwork”). Second, while humanistic values such as telling the truth or valuing others’ opinions are important standards to live by, they don’t make it clear what people must do differently to meet new, challenging objectives. Third, a culture’s values are durable and don’t change just because of revised strategic or operational priorities, or because a leader calls for new ones. Values only change gradually after broad cultural forces combine to initiate new behavior, which over time alters core attitudes — a process that takes years.
Instead of focusing on values, the CEO’s vision should describe the behavior that in the optimal culture will be valued because it will lead to the right results. Examples can be found in the strategy, since it lays out where investments will be made and how resources will be allocated. Leaders should also identify current practices that are successful and that match the requirements of the new strategy and the vision.
5. Be both firm and flexible. A leader who is formulating a vision must be firm about core elements of what should be in it but can and should be flexible on others. Key managers must be included in the process of refining the vision and made an integral part of finalizing and honing it. They must understand what the leader believes is not negotiable, where there is some room for negotiation, and where he is not certain what is best and wants to discuss ideas.
The best vision will come from a disciplined, iterative approach that enables the leader to control how the picture is crafted, while also ensuring that others who need to be aligned feel some ownership. As the CEO brings these influential managers along, every refined version of the vision will sit atop the one that precedes it, like tiles on a well-built roof that overlap for strength. The result should be that instead of following the leader’s vision, managers are attracted to a common vision that they have helped to shape. Once the rest of the organization sees senior managers describing the same sort of future state, it becomes much easier to get a critical mass of employees to commit to the hard work of change.
Following these five principles can ensure a common vision that is clear enough that employees can understand what will be required of them, attractive enough that they will begin to imagine themselves in that future organization, and interesting enough that they will consider what they must do differently.
About the Author
Dan Ciampa, a former CEO, is an adviser to boards and chief executives, especially during high-level transitions, and the author of five books, including Transitions at the Top: What Organizations Must Do to Make Sure New Leaders Succeed (with David L. Dotlich, John Wiley & Sons, 2015).
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Vision Statement in a Business Plan
Table of Contents
Every business begins with an inspiration or a concept for a fresh endeavor. It may have started as a thought or a discussion you had with a possible business partner. You must create a business strategy before considering launching a new enterprise. You can think of a business plan as your company’s road map. You’ll find it simpler to move your company in the direction you want it to go if you have a strategy in place. Making or revising a business plan is a crucial task for long-term success. This is regardless of how long you have been in company or how new you are. An excellent business plan aids in directing you through each phase of founding, running, and expanding your company. The job that your business plans to undertake is specified in your business strategy. One component, the vision statement, introduces the plan’s purpose, needs, and objectives. In order to effectively articulate your goals, developing a vision for your strategy requires understanding your company requirements. You’ll be able to get corporate support by doing this. That’s why, in this post, we are going to take a look at vision in business plan .
The Role of Vision in Business Plan
A vision statement is a written proclamation that outlines the meaning and goals of your company for all parties involved, particularly workers. It outlines the long-term outcomes that your business hopes to achieve.
Because it explains the company’s overall objective, a vision statement is important. Businesses that have greater goals are more desirable to both present and potential workers.
Take the time to create a vision statement that captures your passion and inspires your team. This may have an impact on the long-term success of your business.
A company’s mission statement demonstrates the entrepreneur’s enthusiasm for a brand-new business. Entrepreneurs who are looking to raise funds from venture capitalists or angel investors should demonstrate enthusiasm and excitement in their work.
They may decide not to invest if the entrepreneur isn’t passionate about the venture in which they are investing.
The company’s ultimate goals should be stated in the vision statement , which should be a declaration of the future. Vision statements that claim, “Our firm aims to be number one in the industry,” are frequently seen by bankers and other investors.
The mission statement applies to more than just lenders and investors. It serves as the company’s guiding philosophy while dealing with both external and internal stakeholders.
Customers and workers of the firm are also stakeholders. The corporation occasionally uses parts of its vision statement in its advertising.
When employees can relate to their employer’s vision statement, it makes them feel better. Employees who support the long term vision will be more committed to their work than those who only work for the money.
Difference Between Vision and Mission Statements
The purpose of a firm and its current status are communicated to stakeholders and members of the community through mission statements. Mission statements, by their nature are interested in the present. Future-focused vision statements are created to motivate staff members and provide guidance.
The mission focuses on where you are right now and why you exist. On the other hand the vision discusses your long-term objectives and how you plan to achieve them. The team should be inspired by the goal to change the world and contribute to a cause greater than themselves.
Both mission and vision statements are essential for developing a brand. The brand’s fulfillment of its purpose is the emphasis of the vision statement rather than its mission statement, which focuses on the brand’s purpose.
A vision statement should be your company’s compass even if its purpose and vision statements should be its fundamental components.
It may seem intimidating to write the ideal vision statement, but it doesn’t have to be. You just have to follow some basic rules and procedures and you will be all set.
How to Write a Statement of Vision in Business Plan?
Know the many categories of needs. Your company aim is defined by the business needs. The tasks a user must be able to complete with your product or service are listed under user requirements. Functional requirements outline how your product will act in particular circumstances.
Perform a competitive analysis. Analyze the descriptions of similar or existing items. Read up on industry norms or governing bodies’ rules. To find support issues, analyze problem complaints from the help desk. For inspiration, talk to your stakeholders or possible investors. Determine what numerical or statistical information you can use in your vision statement to support it.
Develop methods for acquiring, analyzing, specifying, and validating requirements. To find out what demands potential consumers have, conduct surveys or focus groups with user group representatives. Make sure you comprehend the duties and goals of the customer. Recognize the relative significance of the features of the product from their point of view. Prioritize the implementation of your ideas so that you can transform the requirements of your clients into detailed written instructions. Together with your development team, go through your results.
Describe your vision in writing. Provide information about your target audience, including who they are, what they want, the name of your product or service, and the main advantage. Additionally, you should describe your main rival and how your product or service is sufficiently unique in your statement.
The vision of a business plan is the organization’s idea of what they hope to be like in five years time. It’s not something that can be accomplished in just the short time span of five years. But the goal should be to keep the vision in the mind and attempt to steer the business in that direction.
We hope you can easily draft up your own vision statement for your business plan after reading this. Vision in business plan is very important and mastering your vision statement will help you a lot in the future. If you have any questions, please let us know!
Abir is a data analyst and researcher. Among her interests are artificial intelligence, machine learning, and natural language processing. As a humanitarian and educator, she actively supports women in tech and promotes diversity.
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The Importance of Vision
When he launched the USA Today national newspaper 25 ago, Allen Neuharth, the CEO of Gannett Company from 1973-1986, was derided by both Wall Street analysts and the newspaper establishment. Having built a very successful chain of regional newspapers and having been named the newspaper publishing Chief Executive of the Year by the Wall Street […]
When he launched the USA Today national newspaper 25 ago, Allen Neuharth, the CEO of Gannett Company from 1973-1986, was derided by both Wall Street analysts and the newspaper establishment. Having built a very successful chain of regional newspapers and having been named the newspaper publishing Chief Executive of the Year by the Wall Street Transcript in 1979, why would Neuharth want to take such a bold and seemingly foolish risk? Who would buy “bite-size” news? The answer today is clear — millions would buy it and continue to buy it, but that was certainly not the case in 1982 when the paper was launched. Neuharth saw a future for his family’s newspaper empire that others could not see. He also saw a time-starved consumer base that was thirsty for news in manageable chunks. Capitalizing on his regional network of newspaper organizations, Neuharth created an elaborate logistical process to produce and deliver a national newspaper to supplement, not replace, regional carriers. What was it about Neuharth that enabled him to see the vast possibilities of a national newspaper? He clearly possessed a vision of what could be and more importantly, the ability to make it a reality.
- TM Tony Mayo is a Lecturer in the Organizational Behavior unit and is the Director of the Leadership Initiative at Harvard Business School.
Setting Strategic Direction: Vision, Strategy, and Tactics
Defining and using the three tools of leadership.
You’re so proud of your new vision statement. It sounds nice. Inspiring, even. But the vision is useless unless it can direct action.
Your vision lays out a destination; your destination guides your strategy; and strategy chooses action. It’s action that leads to success. In those moments of action, having clear direction is crucial for building momentum. If your organization is like most, you spent weeks debating every word crafting your vision, mission, strategy, and goals. But no matter how lofty, if they aren’t created in a way that provides direction, those statements are little more than high-priced indulgences.
Every company means something different by the words “vision” and “strategy.” One person insists that “Provide our customers the highest possible quality widgets” is a vision. A friend takes one look and assures him, “That’s a strategy.” Here are some useful definitions that will help you decide if you’ve set a direction that can truly get traction.
Envisioning the future
Vision is timeless. It’s based on who/what you want to do. It’s why you’ve got an organization in the first place. It must be specific enough that everyone can use it to decide if their work is moving the company forward. Progress towards the vision must be measurable. A vision is independent of specific competition, and while it may mention the customer, it must guide even someone who doesn’t know the customers’ mind. The best visions imply whom the company serves, what it provides, and what distinguishes it from other companies providing the same products and services. Vision sets the broad direction. It says, “Go west, young man.”
Wrong: We will provide exceptional products and services that our customers value.
This vision requires knowing the customers’ mind in order to understand what the company provides. It doesn’t distinguish what is unique about the company, since presumably everyone in the market produces something customers value.
Right: We will help boat owners everywhere navigate new seas with geographically based directional products and services.
This vision tells us the market, the product (navigation products and services), the distinguisher (geographically based), and the progress measurement (delight).
Some organizations may call this a mission statement, rather than a vision. Or, they may have both a vision and a mission, with the vision expressing the ideal world or company, and the mission expressing the company’s purpose. For our purposes, they’re the same. A mission statement rounds out the vision. Together, they give timeless, overarching principles chosen by the company that express the company’s reason for being.
The strategy thing
Strategy links the destination (vision) with current reality. Strategy applies to the whole company, and answers the question “How will we reach our vision, given current market conditions, competitive scenario, regulatory environment, etc.?” Strategy is narrower than vision, but broad enough to guide companywide organization structure, hiring, capabilities that must be developed, and so on. Strategy says, “We’re going west, but we ran into this grand canyon. We can go around to the north or south. Let’s choose south.”
For example, a company may have a vision to “provide scientifically proven technology to solve the medical needs of consumers and hospitals.” In the 1950s, the strategy may be doing in-house research, hiring and developing scientists, and a compensation program based on discovery. In the 1990s, the same company may have a strategy of acquiring small drug-making companies and buying and protecting patents from other companies. Both strategies will reach the vision, but they are appropriate for different competitive environments, and they have different organization structures, different financing options, and different operational characteristics.
You know you have a strategy if you chose your current path from many alternatives, all of which would have reached your vision, each of which would have required hiring different people and building different systems. If you didn’t consider many alternatives, or you didn’t choose your alternative considering your competition, your vision, and your current market conditions, then you probably have a tactic, not a strategy. If you can execute your strategy with your current people, reward systems, and organization structure, then it’s not a strategy, it’s a tactic.
Tactics are limited in scope, typically just to a part of the company. They’re shorter term than a strategy. They involve executing given the existing capabilities and resources of the company. Unlike strategy, tactics generally work within the current organization structure, rather than changing the organization. Tactics say, “We’re on the south path. Let’s travel two miles today.” Your tactics probably won’t work unless they’re generated from a strategy that lays out a consistent philosophy for how your company will compete/win/attract customers in today’s market.
Your “moments of truth” are those moments in time when you build traction and momentum. For example, a moment of truth in creating a quality-driven organization might be when the CEO refuses to ship a poor-quality product, even though it will hurt quarterly numbers. Moments of truth always happen during a tactical action. That’s why you need a vision and strategy—without them, people won’t have the guidance to ensure they can move the company forward in that moment.
Your strategy also helps you find your moments of truth. If your strategy involves locking up important distributor relationships, your moments will involve reputation and relationship building, creating the perception of value to the distributors, and establishing negotiating leverage to capture an exclusive relationship. If your strategy is to be a low-cost provider, moments of truth might be times when opportunities for efficiencies arise, or incidents where you can encourage a “continuous improvement” mindset in your team.
At the end of the day, your vision and strategy only exist to drive tactics. And often, the most significant tactics are those moments of truth whose effects are far-reaching. When your vision sets direction and your strategy ties it to your current situation, they provide a compass for everyone in your organization to follow for years to come.
Summary of Vision, Strategy, and Tactics
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How to Write a Vision Statement for Your Business
Why your business needs a vision statement, when should you write a vision statement.
- Tips to Create Your Company Vision Statement
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Creating strategies for your business takes time and dedication. As a business owner with many responsibilities, you may prioritize items that you deem profitable. And when you hear the term vision statement, it’s probably a task that many entrepreneurs write off as an unimportant step toward success.
However, this statement is one of the most vital items you can produce for your brand. A strong vision statement creates a concrete foundation for your company’s growth, motivates everyone connected to the business, and provides direction to make smart decisions for long-term success.
Continue reading for a step-by-step guide on how to write a strong vision statement.
A vision statement is a key motivator behind your business’s success, according to brand strategist and motivational speaker Rich Keller. “It’s the desired future outcome you want to achieve with your company,” Keller told The Balance by phone. “Having the end goal means you can work backward and set yourself up for success.”
Research shows employees work harder when they feel connected to a bigger purpose, yet just about half (51%) of employed Americans say they get a sense of identity from their job, while 47% say their job is simply what they do for a living, according to recent data from Pew Research Center. With a vision statement, employees can get an idea of where your company’s brand is going, further building that connection between an individual and the business.
“The vision is emotional—it’s the Oz for the entrepreneur and what keeps the company moving forward,” Keller explained.
As the founder, you can be similarly inspired by the vision statement. “Great brands always begin with the end in mind. They have a vision of what they want the world to be and how their brand fits in,” Keller said.
By keeping your business’ end goal in mind, you can be more strategic in making decisions, leveraging the vision statement to build your company.
According to employment site Indeed, if used correctly, a vision statement can be a vital tool while a company is growing and developing. The Indeed staff suggests treating it as a ruler used to measure and compare the company’s decisions and future successes.
With that in mind, it’s important to note that a vision statement can be created and implemented regardless of your business’s age or size. While starting your business off with a vision statement allows you to be aligned from the beginning, writing it years in will allow you to reset strategies and make smarter future decisions.
Five Tips to Create Your Company Vision Statement
A vision statement shares the long-term goals, produces a narrative for marketing, and creates a strategic framework. It also builds alignment and connection between the business and its people.
A vision statement should only be a few sentences but have everlasting power in its meaning. This may sound like a lofty task to complete, but the five simple tactics below can help get you there.
Your business’s vision acts as a lens into the future, pinpointing the outcomes you are working toward. Dream big for your company and focus on the long term. “Write the vision statement in the present tense as though it has already happened,” Keller suggested.
This is a key principle of positive thinking, which has been proven to have both mental and physical health benefits. According to recent research from Johns Hopkins Medicine, people who are more positive may be better protected against the inflammatory damage of stress, and also have a higher likelihood of making better health and life decisions.
Imagine you are being interviewed years from now, speaking about your company’s success. Use these potential interview questions to start thinking big:
- What do you want to be remembered for?
- What is your company’s biggest achievement?
- In what ways have you impacted the community and industry at large?
“It's like answering the question ‘what do you want to be when you grow up?’ for your business,” Keller said. Answering questions that speak to massive scale allow you to visualize the future of your business and articulate your most audacious goals. If you need more inspiration to get started, here are a few vision statements from well-known brands:
- Tesla: “To create the most compelling car company of the 21st century by driving the world's transition to electric vehicles.”
- Nike: “To bring inspiration and innovation to every athlete in the world.”
- American Society for the Prevention of Cruelty to Animals (ASPCA): “That the United States is a humane community in which all animals are treated with respect and kindness.”
Follow a Formula
You can be a visionary for your company by using a simple formula for how to write a vision statement. In a paper published in the Journal of Business Strategy, researchers Sooksan Kantabutra and Gayle C. Avery outline a few strategies for getting there. Consider these steps:
- Choose who will be a part of writing the statement. If you are an early-stage business, this will be you and any founding team members. If you are further along in your development, this could be a diverse range of team members.
- Answer deeper questions (such as the ones included in the previous section) to obtain a unique view of the future you hope for the company.
- Make it specific to your organization, using words and goals that would inspire the team. This shouldn't be a statement any company can use.
- Keep it brief—between 11 and 22 words—concise enough so that it can be remembered with ease.
This is a straightforward way to distill your business vision into a single message that shares the highest goals. Already have a vision statement? Run it through these steps and see if it still speaks to your company’s long-term aim.
Commit to and Interact With Your Vision
A vision statement creates the framework to ensure all your goals and strategies can ultimately become a reality. Give your vision statement prominent placement within the company workspace. You can do this by using it to open strategy meetings, kick off a new quarter, and encouraging employees to take ownership over it.
Your vision should be a living entity among your team, community, and industry. Once written, you need to actively commit to your vision, both internally and externally.
If your employees believe in your vision statement as much as you do, that passion will shine through to clients or customers. To get employees more involved with the concept, consider creating incentives by rewarding employees when you catch them embracing and exemplifying said vision.
Be True to Your Vision
“Visionaries can think of and have faith in the future. That’s who you’re encouraged to be when you write your vision statement,” Keller said. If you don’t have faith in your ability to achieve the vision, you won’t be able to find sustainable, long-term success. Your statement must reflect the greatest truth you can see for your business.
Writing your vision statement should force you to be both honest and audacious about how much you want to succeed. Ensure you are speaking to goals that are fundamental to your ambition and foresight.
Revisit Your Company Vision Statement Regularly
One of the most common misconceptions about vision statements is that they are created once in the company’s lifetime and never touched again. You are failing at living your vision if you don’t allow yours to grow and evolve with you and your business.
A vision statement is a living, breathing document that you should regularly revisit and revise. Once your company reaches the goals it has set for itself, look ahead and create a new pathway for success. Your statement needs to reflect your company’s current strategies, purpose, and goals. As you accomplish goals or pivot your brand, the vision statement must morph along with it.
Vision is not static—it changes over time just as you and your company grow. Use the above tips for how to write and revise your vision statement as frequently as needed.
Your company has big aspirations, and you should find excitement in writing those down for all to see. Your statement needs to reflect those big dreams to inspire you and your team, customers, and community to action.
Pew Research Center. " How Americans View Their Jobs ." Accessed April 30, 2021.
Indeed. " Guidelines for Writing a Vision Statement for Company Goals ." Accessed April 30, 2021.
Johns Hopkins Medicine. " The Power of Positive Thinking ." Accessed April 30, 2021.
Panmore. " Tesla, Inc.’s Mission Statement & Vision Statement (An Analysis) ." Accessed April 30, 2021.
Panmore. " Nike Inc.’s Mission Statement & Vision Statement (An Analysis) ." Accessed April 30, 2021.
ASPCA. " Vision ." Accessed April 30, 2021.
Journal of Business Strategy. “ The Power of Vision: Statements that Resonate .” Accessed April 30, 2021.
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22 vision statem ...
22 vision statement examples to help you write your own.
When launching a startup, founders typically have an idea of what they want to achieve — a vision of what success will look like. During the strategic planning process, it’s important to put this vision into concrete terms. Not only does a vision statement clarify your thoughts, but it helps employees and stakeholders understand what the business has set out to accomplish. No matter what the business, a good mission and vision statement can inspire and motivate employees to make that vision a reality.
Whether it’s your first or fifth business, writing a compelling vision statement can be challenging. Below, we'll share how to write a vision statement — one that inspires your employees and positively impacts your business — and we'll look at a few vision statement examples to help you get started.
What is a vision statement?
A personal mission statement and personal vision statement can be used to guide our decision-making and help us stay focused to meet our long-term goals. Company statements are no different. A company vision statement is one of your most important business documents, along with your mission statement and core values. Although it’s easy to confuse the three, each one is unique and serves its own purpose.
Core values are the organization’s long-term beliefs and principles that guide employee behavior. A mission statement deals with “why” an organization exists, while a vision statement outlines “what” that existence will eventually look like. A mission statement has to do with what the organization is doing in the present, while a vision statement focuses on the future. Mission statement examples include L’Oreal’s “Offering all women and men worldwide the best of cosmetics innovation in terms of quality, efficacy, and safety.” Conversely, Disney’s vision for itself is “to be one of the world’s leading producers and providers of entertainment and information.”
Primarily intended for internal employees and shareholders, a vision statement describes what an organization aspires to be. It helps to think of a vision statement as part roadmap, part inspiration. By outlining a long-term vision, rather than just short-term goals, a vision statement helps give the organization shape and purpose.
Why it’s important to have a vision statement.
Despite the importance of a vision statement, many companies choose to operate without one. Some simply combine their mission and vision into one general document. Others do away with the idea altogether, thinking that corporate visions are vague statements that serve no actual purpose.
Furthermore, studies show that highly aligned organizations grow revenue 58% faster, and are 72% more profitable than ones that are unaligned. If an organization doesn’t have a vision or a clear idea of what it wants, it will greatly limit its opportunities and have a difficult time inspiring employees to stay committed.
How to write a vision statement.
Writing a vision statement may seem like a daunting task. It’s read by every employee and shareholder, and greatly impacts the success of the organization. And a vision statement takes time and thought. When done well, a vision statement can provide the encouragement your company needs to achieve its goals. To streamline the process, keep the following steps in mind while crafting your vision statement:
1. Determine who will help write your vision statement.
When starting out, it’s likely you and your partners will be responsible for writing your company’s vision statement. Once you start hiring, you can ask managers and employees to contribute additional insights. Interviewing a range of individuals will help create a vision statement that integrates and speaks directly to the entire organization.
2. Project your goals for the future.
Imagine your company five or ten years down the line. The outcome you envision — your dream for the future, your success as a company — should be captured in the vision statement. Keep in mind that the statement should only include the vision, not an actual step-by-step plan for implementing solutions.
The following questions can help you clarify your vision:
- Where do we want the organization to go?
- What can we realistically achieve?
- What problem does the organization intend to solve?
- What are the changes we believe the organization can make for individuals? For the industry?
- How will things be different if the vision is realized?
- What phrases or keywords describe the type of organization and outcome we want?
3. Stick to the specifics.
A generic vision statement — one that sounds like it could apply to any company — will not be enough to motivate your team. Vision works best when it’s specific and describes an end goal only your organization can provide. Don’t be afraid to dream big. A lukewarm vision will only yield lukewarm results. So it’s important to be bold, and even risky, when writing your vision statement.
4. Keep it short and simple.
While it should be specific, a vision statement shouldn’t be overly detailed. It should be concise. Start by jotting down all of your ideas, and then pare those down to the essentials. Keeping just one or two key points helps create a clear vision that’s easy for everyone to focus on and fulfill. Stay away from technical terms and jargon, and use the present tense. Rather than trying to write something catchy, aim for clarity. A great vision statement works best when it’s simple, memorable, and inspirational.
Revisit your vision often as your company evolves.
A vision statement sets an organization’s sights on the future. However, once that future is reached, the vision needs to continue moving forward. Your vision statement is a living document, not a set of static sentences. It plays an important part in your overall strategic plan for a certain time frame. It should therefore be regularly updated to reflect your organization’s current purpose.
Constantly communicate your vision.
Once you have a vision statement that articulates your end goal, make sure it’s clearly communicated. A vision is more effective when your entire organization takes it to heart. Commit the proper resources and time toward realizing the vision you’ve set. This can mean investing in seminars and training or launching a new product. It can also include offering the lowest possible prices, entering new markets, or exploring other areas of opportunity. A good way to help everyone align with a company's vision statement is by inviting them into the process. Ask for employees’ input, and suggest ways to incorporate the vision into their work. Then, make sure to recognize or reward individuals for their standout contributions.
Vision statement examples.
Sometimes, seeing what works for notable companies is just the inspiration you need to create your own vision statement. Below are some inspiring vision statements from today’s top companies:
Concept-based vision statements.
Some vision statements are based on concepts of what the company hopes to be or achieve in the future. This can be a general statement focused on customers, or a position the company wants to hold within the industry. Below are a few examples of concept-based vision statements:
- BBC: “To be the most creative organization in the world”
- Disney: “To make people happy.”
- Google: “To provide access to the world’s information in one click”
- IKEA: “To create a better everyday life for the many people”
- Instagram: “Capture and share the world’s moments”
- LinkedIn: "Create economic opportunity for every member of the global workforce”
- Microsoft: “To help people throughout the world realize their full potential”
- Nike: “To bring inspiration and innovation to every athlete in the world”
- Oxfam: “A just world without poverty”
- Shopify: “To make commerce better for everyone”
- Sony: "To be a company that inspires and fulfills your curiosity.”
- TED: “Spread ideas”
- Tesla: “To accelerate the world’s transition to sustainable energy”
- Uber: “We ignite opportunity by setting the world in motion”
- Whole Foods : “To nourish people and the planet.”
Quality-based vision statements.
Other common vision statements are focused on internal goals. These include the type of products and services the company hopes to provide as they grow. Quality-based vision statements can also relate to company culture and operations. The following are some examples from actual United States companies in different industries:
- Amazon: “Our vision is to be earth’s most customer-centric company, where customers can find and discover anything they might want to buy online.”
- Avon: “ To be the company that best understands and satisfies the product, service, and self-fulfillment needs of women—globally.”
- Ben & Jerry’s: “Making the best ice cream in the nicest possible way”
- Ford: “People working together as a lean, global enterprise to make people’s lives better through automotive and mobility leadership.”
- IBM: “To be the world’s most successful and important information technology company. Successful in helping our customers apply technology to solve their problems. Successful in introducing this extraordinary technology to new customers. Important because we will continue to be the basic resource of much of what is invested in this industry.”
- McDonald’s: “To move with velocity to drive profitable growth and become an even better McDonald’s serving more customers delicious food each day around the world.”
- Nordstrom: “To serve our customers better, to always be relevant in their lives, and to form lifelong relationships”
- Starbucks: “To establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.”
- Warby Parker: “We believe that buying glasses should be easy and fun. It should leave you happy and good-looking, with money in your pocket. We also believe that everyone has the right to see.”
- Zappos: “To provide the best customer service possible. Deliver 'WOW' through service”
Keep a clear vision.
Even if it’s just a few sentences, a vision statement provides a lot of value. Not only does it outline the company’s desired outcome, but it can communicate intentions and hopes for the future. The best part is that a vision statement changes with your organization. When a vision is reached or updated, it’s time to create a new vision statement. This encourages everyone toward greater goals, and opens your company to more possibilities.
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This is the first step in starting a strategic plan for your business. Whether your organization is 100 years old or just beginning, this is the first step in strategic plan development. For some organizations, this step will be revisiting and possibly rewriting your mission statement, for others, this will be the first time constructing the statement.
Mission statements should be informational for the leaders, employees, and the customers. The statement should concisely talk about the organization's direction and reason for its existence, and its ideals. The statement should be future looking and not stuck in the here and now. Don't leave yourself at a "dead end with nowhere to turn" with your statement. Be accurately broad minded with the words being used in the statement. An example would be the terminology used for a trucking business. The company is not in the "trucking" business but in the asset relocation business. Do not limit your growth with your mission statement. What if your organization were to grow and incorporate aircraft or drones into its business. Saying you were in the trucking business would not leave room for upcoming technology or other avenues of expansion. By saying you were in asset relocation the organization also could get into internet data systems with expertise in transporting data from one network to another or something along those lines. The point is to be accurate but do not limit your organization with the wrong wording.
There are some organizations that call the mission statement old fashion and have done away with them. Part of the reason is because organizations quit spending time developing their statements, which resulted in generic, bland, useless statements that could fit any organization on a city block. The result from this lack of defining effort was the statement known as the mantra. A mantra statement is one sentence that defines an organization. A great example of a mantra comes from Nike. Nike's "Just Do It," is memorable and says it all – where they are going, what they are inspiring their customer to do, and what they plan for the future – to just do it.
An organization's vision statement is a vivid painting of an organization as it implements its strategic plan. It's a word picture that inspires everyone and does not have to be saddled in the here and now but can be more of a saying that could be found on an inspirational poster for the organization to aspire to.
Value statements are growing in importance, especially in today's dynamic environment where organizations are finding it extremely important for strategic plans to guide their organization in an ever-expanding global market. The value statement is the ideals and beliefs that motivate the leaders and employees of an organization and are the essential priorities behind the leadership's decisions.
The Mission Statement
Everyone knows a company's business plan is important. Without a plan investors will totally ignore you and your business. What can be as important as the business plan is an organization's mission statement. The mission statement is an organization's business plan in a nutshell – a summarizations of goals, philosophies, products, services, technology, etc. – every level of the organization. It should inspire. The statement should have sizzle. It should paint a clear picture for the organization's future. It should use colorful language that portrays positive action and a golden future.
Too many times leaders breeze through or completely overlook the mission statement, or they relegate it to underlings who do not understand every facet of the organization. What happens is the statement is written using simple and vague language. What is written is a mission statement that is generic in nature at best, and could fit any number of organizations. The statement is useless as a tool for employees to know what's important in the organization and where their priorities should be aligned. A generic statement does not provide any useful information to an organization's customers either. Basically, a plain statement that sounds good but does not say anything substantial or informative leaves everyone with their head either buried in the sand or stuck in the clouds – the statement gives no direction. So make sure the mission statement is unique to your organization alone and cannot be used by your competitor. This is a good sign you have a useful mission statement.
In about three sentences, a mission statement should tell everyone, what the business is about, its ideals, and where the organization is headed, and how it plans on getting there. In essence, it explains why an organization exists and its purpose for being there. The statement presents the organization's image to the public. For this reason, time should be taken to ensure the proper words are used that portrays an accurate image of the organization and its future plans. Along the same lines, the phrases used should set an order of priorities for the leaders and employees about the products and services delivered by the organization. Remember, it's a succinct statement that outlines an organization's purpose, plan, and priorities.
Mission Statement Do's and Don'ts
Do use specific language familiar within your organization
Don't use cliché's or slang terms
Do use verbs that will provoke action
Don't use stale language and the words "if" and "of"
Do have a phrase that explains why the organization exists
Don't answer only the" what" of the organization
Do use precise succinct wording
Don't use rambling phrases that leads no where
Do use wording that is memorable and has rhythm and flow
Don't use tongue twisting twaddle
Do create the illusion of an epiphany
Don't be half-witted in the statement
The Good, the Bad and the Ugly
Good – "Our mission is to be the leading global innovator, developer and provider of cleaning, sanitation and maintenance products, systems, and services. As a team, we will achieve aggressive growth and fair return for our shareholders. We will accomplish this by exceeding the expectations of our customers while conserving resources and preserving the quality of the environment." This is three solid, simple sentences that says where Ecolab INC wants to go and how they are going to get there. It addresses their business and it uses specific language to their business. Their statement uses action verbs and addresses shareholders, employees and customers.
Bad – "McDonald's brand mission is to be our customers' favorite place and way to eat and drink. Our worldwide operations are aligned around a global strategy called the Plan to Win, which center on an exceptional customer experience – People, Products, Place, Price and Promotion. We are committed to continuously improving our operations and enhancing our customers' experience." The first sentence starts the statement off with a reasonably clear picture, but then the Golden Arches loses its signal and becomes really hazy with catch phrases and a list of catch words to try and paint a picture, but doesn't really say anything. The last sentence is true McDonald's branding – that sentence has made the fast food restaurant the giant in the industry it is today.
Ugly " The Global Beauty Leader We will build a unique portfolio of Beauty and related brands, striving to surpass our competitors in quality, innovation and value, and elevating our image to become the Beauty company most women turn to worldwide. The Women's Choice for Buying We will become the destination store for women, offering the convenience of multiple brands and channels, and providing a personal high touch shopping experience that helps create lifelong customer relationships. The Premier Direct Seller We will expand our presence in direct selling and lead the reinvention of the channel, offering an entrepreneurial opportunity that delivers superior earnings, recognition, service and support, making it easy and rewarding to be affiliated with Avon and elevating the image of our industry. The Best Place to Work We will be known for our leadership edge, through our passion for high standards, our respect for diversity and our commitment to create exceptional opportunities for professional growth so that associates can fulfill their highest potential. The Largest Women's Foundation We will be a committed global champion for the health and well-being of women through philanthropic efforts that eliminate breast cancer from the face of the earth, and that empower women to achieve economic independence. The Most Admired Company We will deliver superior returns to our shareholders by tirelessly pursuing new growth opportunities while continually improving our profitability, a socially responsible, ethical company that is watched and emulated as a model of success." This is too long, too many catch words and phrases, but it does continuously say Avon wants to be the best.
Vision statements say where your organization is going, hence why the statement is important for the strategic plan. The mission statement is for the here and now and explains why an organization exists. Mission statements are for both employees and customers while the vision statement is written to inspire and provide a roadmap to the future for employees.
Creating the vision statement for your organization is truly the fun part of strategic planning since most of the rules are thrown out the window. Originally, vision statements were written after the strategic plan had been implemented to describe the ideal organization so everyone knew what they were trying to achieve. Today the vision statement has taken on more of the role as a motivational tool organizations use to inspire its employees to achieve idealistic goals that for the most part are hopelessly impossible to achieve. They are simple but inspiring sentences that should say where the organization wants to be in the future, and hopefully provides motivation for the employees to strive for that ideal. The only true rule in writing the vision statement is to keep it clear and concise.
Look at Habitat for Humanity's vision statement – "A world where everyone has a decent place to live." It's a great summarization of the organization's purpose for existence and it says their wish for the future. Vision statements should be vivid, memorable, and that is the reason for keeping it short – it's easier for people to remember. If they begin to ramble and get past eighteen to twenty words then the statement is trying to say too much. The statement should summarize the organization's main goal in an aspirational way. Look at the Human Rights Campaign's vision statement -- "Equality for everyone." Their statement says it all in three words. As noted in the examples, it is okay to dream big in the statement and at the same time the statement shows the real reason both of these organizations were created. So have a brainstorming session and set high standards for your organization with a far-reaching vision statement.
As previously stated, the vision statement tells employees where the organization is heading in the future. For this reason, the statement is important for guiding employees in their decision making so the vision statement must align with the organization's mission statement and overall business plan. Before writing the vision statement, it's important to know where the company stands at that moment – how it stacks up against the competition, the organization's overall health, and its talent pool. Also know the organization's realistic and planned goals for the immediate future. This will enable the statement to outline key objectives for the employees without outlining a how to mantra everyone must follow. This frees up various departments within the organization to write their own plan that fits their specific role to meet the goal set forth in the vision statement.
Here are a few simple rules to follow when writing your vision statement:
Outline goals 5, 10 or even 20 years in the future
Use words that evoke emotion and action
Avoid words and phrases that do not show definite action – hope to, might, would like to…
Use present tense – avoid past tense or future tenses – this is for the here and now to guide into the future.
The value statement guides the organization and gives direction to its decision making process. The organization's values are their beliefs and provide direction to how employees are to act and the type of behavior their decisions, instructions, and actions are to reflect. Values are the virtues the organization desires its employees to adhere to. They are the organization's beliefs and morale qualities that should pervade every fiber of its being.
To begin writing such a statement, a quick survey is needed that should include members of the organization's leadership and management. The questions should simply ask about their beliefs and the morale attributes they adhere to in day-to-day activities. Include questions that ask what morale codes they use when making decisions. Ensure the questions will result in answers that will provide the organization's core values. Once the results are in, each virtue, belief, etc., should be listed and the leadership team should prioritize the answers in order of importance for the organization's value system.
Unlike the vision statement, the organization's value statement does not have to be only one value and sentence. There can be more than one value – there can be many but they should be listed in order of importance. The values should reflect not only the organization's employees, but also its customers, and shareholders. Here is an example of listing values in order of importance. These are from a Mennonite church:
1. We value the Scriptures as our guide to faithful living. 2. We value lifelong spiritual growth in the way of Jesus. 3. We want to be a worshiping community that loves one another. 4. We want to share God's love with others in word and service. 5. We want to be a light of hope here and around the world.
Where the vision statement was written realizing it probably was unattainable, the value statement should be lived and practiced daily in the organization. If the organization does not practice its values, it could end up being another Enron. In November, 1997, Enron bought out a business partner's portion of a company. Enron then sold the stake to a company it created that was ran by an Enron officer. That was how the financial shell game of lies and deceitful financial practices that led to the company's collapse began.
Value statements should guide the organization so it does not become another Enron. The value statement will guide the leadership towards making decisions that properly align with the organization's mission and vision. The organization's values should permeate throughout its activities and help its leadership make ethical decisions that will achieve its mission.
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What is a vision statement?
Based on your goals and aspirations, a vision is the desired image of what you want your business to become in the future.
A vision statement provides you and your employees with direction, purpose, motivation and inspiration to achieve the desired outcome for your business.
What is the purpose of a vision statement?
A vision statement is an important part of your business strategy. It provides you with insights on where your business is heading by providing long-term direction. Your vision statement also aligns with the mission, core values and culture of your business.
A vision statement answers three key questions:
- Where do you want your business to be in the future?
- What is the purpose of your business?
- What impacts do you want your business to have on your customers, community and/or the world?
How to create a vision statement
Each business has a unique vision statement, but the process of preparing and writing a vision statement is similar for most of them. Let us look at some steps that will help you prepare a vision statement.
Writing a vision statement requires analysing both internal and external aspects of your business as well as the current state of your business and where you want it to be in the future.
Your vision should be aligned to fundamental aspects of your business. Answer the following questions to assist you with this process:
- What are the core values of your business?
- What is your business mission?
- What is the business culture that you want to cultivate?
- What are your business’s current and future goals?
- Where do you see your business in ten years' time?
It’s important to get your staff involved in brainstorming and sharing ideas for a vision statement. Key staff can provide helpful insights on the business aspects mentioned above and the brainstorming process creates a sense of shared purpose, cohesiveness and direction.
Components of a good vision statement
Now that you have your answers ready, it’s time to develop your vision statement. Before you start writing, consider the following components which will aid you in writing an effective statement.
Make sure your vision statement is:
- concise and clear (make the vision statement simple and easy to read)
- brief (stick to the essentials)
- future-oriented (a vision statement focuses on the future long-term goals and destination)
- ambitious but realistic (keep in mind your resources)
- inspiring and emotive (you want the vision statement to inspire and motivate people).
Examples of vision statements
Regardless of your business size or industry, a vision statement tells you where you want your business to be in the future and clarifies the path forward to achieve your objectives. Below are some examples of vision statements from businesses:
Using your business vision statement
As your business grows and expands, revisiting your vision statement can provide you with insights into the direction your business is going and whether you are on the right path to achieving your desired aspirations.
You can also use your vision statement in your marketing and promotional materials, either by having it on display in your place of business, posted on the business webpage/social media accounts, or incorporated as part of your business brand.
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- Section 1. An Overview of Strategic Planning or "VMOSA" (Vision, Mission, Objectives, Strategies, and Action Plans)
Chapter 8 Sections
- Section 2. Proclaiming Your Dream: Developing Vision and Mission Statements
- Section 3. Creating Objectives
- Section 4. Developing Successful Strategies: Planning to Win
- Section 5. Developing an Action Plan
- Section 6. Obtaining Feedback from Constituents: What Changes are Important and Feasible?
- Section 7. Identifying Action Steps in Bringing About Community and System Change
- Main Section
VMOSA (Vision, Mission, Objectives, Strategies, and Action Plans) is a practical planning process used to help community groups define a vision and develop practical ways to enact change. VMOSA helps your organization set and achieve short term goals while keeping sight of your long term vision. Implementing this planning process into your group's efforts supports developing a clear mission, building consensus, and grounding your group's dreams. This section explores how and when to implement VMOSA into your organization's planning process.
What is VMOSA?
One way to make that journey is through strategic planning, the process by which a group defines its own "VMOSA;" that is, its V ision, M ission, O bjectives, S trategies, and A ction Plans. VMOSA is a practical planning process that can be used by any community organization or initiative. This comprehensive planning tool can help your organization by providing a blueprint for moving from dreams to actions to positive outcomes for your community.
In this section, we will give a general overview of the process, and touch briefly on each of the individual parts. In Examples, we'll show you how an initiative to prevent adolescent pregnancy used the VMOSA process effectively. Then, in Tools, we offer you a possible agenda for a planning retreat, should your organization decide to use this process. Finally, the remaining sections in this chapter will walk you through the steps needed to fully develop each portion of the process.
Why should your organization use VMOSA?
Why should your organization use this planning process? There are many good reasons, including all of the following:
- The VMOSA process grounds your dreams. It makes good ideas possible by laying out what needs to happen in order to achieve your vision.
- By creating this process in a group effort (taking care to involve both people affected by the problem and those with the abilities to change it), it allows your organization to build consensus around your focus and the necessary steps your organization should take.
- The process gives you an opportunity to develop your vision and mission together with those in the community who will be affected by what you do. That means that your work is much more likely to address the community’s real needs and desires, rather than what you think they might be. It also means community ownership of the vision and mission, putting everyone on the same page and greatly increasing the chances that any effort will be successful.
- VMOSA allows your organization to focus on your short-term goals while keeping sight of your long-term vision and mission.
When should you use VMOSA?
So, when should you use this strategic planning process? Of course, it always makes sense for your organization to have the direction and order it gives you, but there are some times it makes particularly good sense to use this process. These times include:
- When you are starting a new organization.
- When your organization is starting a new initiative or large project, or is going to begin work in a new direction.
- When your group is moving into a new phase of an ongoing effort.
- When you are trying to invigorate an older initiative that has lost its focus or momentum.
- When you’re applying for new funding or to a new funder. It’s important under these circumstances to clarify your vision and mission so that any funding you seek supports what your organization actually stands for. Otherwise, you can wind up with strings attached to the money that require you to take a direction not in keeping with your organization’s real purpose or philosophy.
Let's look briefly at each of the individual ingredients important in this process. Then, in the next few sections we'll look at each of these in a more in-depth manner, and explain how to go about developing each step of the planning process.
Vision (the dream)
Your vision communicates what your organization believes are the ideal conditions for your community – how things would look if the issue important to you were perfectly addressed. This utopian dream is generally described by one or more phrases or vision statements, which are brief proclamations that convey the community's dreams for the future. By developing a vision statement, your organization makes the beliefs and governing principles of your organization clear to the greater community (as well as to your own staff, participants, and volunteers).
There are certain characteristics that most vision statements have in common. In general, vision statements should be:
- Understood and shared by members of the community
- Broad enough to encompass a variety of local perspectives
- Inspiring and uplifting to everyone involved in your effort
- Easy to communicate - for example, they should be short enough to fit on a T-shirt
Here are a few vision statements which meet the above criteria:
- Healthy children
- Safe streets, safe neighborhoods
- Every house a home
- Education for all
- Peace on earth
Mission (the what and why)
Developing mission statements are the next step in the action planning process. An organization's mission statement describes what the group is going to do, and why it's going to do that. Mission statements are similar to vision statements, but they're more concrete, and they are definitely more "action-oriented" than vision statements. The mission might refer to a problem, such as an inadequate housing, or a goal, such as providing access to health care for everyone. And, while they don't go into a lot of detail, they start to hint - very broadly - at how your organization might go about fixing the problems it has noted. Some general guiding principles about mission statements are that they are:
- Concise . Although not as short a phrase as a vision statement, a mission statement should still get its point across in one sentence.
- Outcome-oriented . Mission statements explain the overarching outcomes your organization is working to achieve.
- Inclusive . While mission statements do make statements about your group's overarching goals, it's very important that they do so very broadly. Good mission statements are not limiting in the strategies or sectors of the community that may become involved in the project.
The following mission statements are examples that meet the above criteria.
- "To promote child health and development through a comprehensive family and community initiative."
- "To create a thriving African American community through development of jobs, education, housing, and cultural pride.
- "To develop a safe and healthy neighborhood through collaborative planning, community action, and policy advocacy."
While vision and mission statements themselves should be short, it often makes sense for an organization to include its deeply held beliefs or philosophy, which may in fact define both its work and the organization itself. One way to do this without sacrificing the directness of the vision and mission statements is to include guiding principles as an addition to the statements. These can lay out the beliefs of the organization while keeping its vision and mission statements short and to the point.
Objectives (how much of what will be accomplished by when)
Once an organization has developed its mission statement, its next step is to develop the specific objectives that are focused on achieving that mission. Objectives refer to specific measurable results for the initiative's broad goals. An organization's objectives generally lay out how much of what will be accomplished by when. For example, one of several objectives for a community initiative to promote care and caring for older adults might be: "By 2025 (by when), to increase by 20% (how much) those elders reporting that they are in daily contact with someone who cares about them (of what)."
There are three basic types of objectives . They are:
- Behavioral objectives . These objectives look at changing the behaviors of people (what they are doing and saying) and the products (or results) of their behaviors. For example, a neighborhood improvement group might develop an objective around having an increased amount of home repair taking place (the behavior) or of improved housing (the result).
- Community-level outcome objectives . These are related to behavioral outcome objectives, but are more focused more on a community level instead of an individual level. For example, the same group might suggest increasing the percentage of decent affordable housing in the community as a community-level outcome objective.
- Process objectives . These are the objectives that refer to the implementation of activities necessary to achieve other objectives. For example, the group might adopt a comprehensive plan for improving neighborhood housing.
It's important to understand that these different types of objectives aren't mutually exclusive. Most groups will develop objectives in all three categories. Examples of objectives include:
- By December 2030, to increase by 30% parent engagement (i.e., talking, playing, reading) with children under 2 years of age. ( Behavioral objective )
- By 2025, to have made a 40% increase in youth graduating from high school. ( Community -level outcome objective )
- By the year 2026, increase by 30% the percentage of families that own their home. ( Community-level outcome objective )
- By December of this year, implement the volunteer training program for all volunteers. ( Process objective )
Strategies (the how)
The next step in the process of VMOSA is developing your strategies. Strategies explain how the initiative will reach its objectives. Generally, organizations will have a wide variety of strategies that include people from all of the different parts, or sectors, of the community. These strategies range from the very broad, which encompass people and resources from many different parts of the community, to the very specific, which aim at carefully defined areas.
Examples of broad strategies include:
- A child health program might use social marketing to promote adult involvement with children
- An adolescent pregnancy initiative might decide to increase access to contraceptives in the community
- An urban revitalization project might enhance the artistic life of the community by encouraging artists to perform in the area
Five types of specific strategies can help guide most interventions . They are:
- Providing information and enhancing skills (e.g., offer skills training in conflict management)
- Enhancing services and support (e.g., start a mentoring programs for high-risk youth)
- Modify access, barriers, and opportunities (such as offering scholarships to students who would be otherwise unable to attend college)
- Change the consequences of efforts (e.g., provide incentives for community members to volunteer)
- Modify policies (e.g., change business policies to allow parents and guardians and volunteers to spend more time with young children)
Action plan (what change will happen; who will do what by when to make it happen)
Finally, an organization's action plan describes in great detail exactly how strategies will be implemented to accomplish the objectives developed earlier in this process. The plan refers to: a) specific (community and systems) changes to be sought, and b) the specific action steps necessary to bring about changes in all of the relevant sectors, or parts, of the community.
The key aspects of the intervention or (community and systems) changes to be sought are outlined in the action plan. For example, in a program whose mission is to increase youth interest in politics, one of the strategies might be to teach students about the electoral system. Some of the action steps, then, might be to develop age-appropriate materials for students, to hold mock elections for candidates in local schools, and to include some teaching time in the curriculum.
Action steps are developed for each component of the intervention or (community and systems) changes to be sought. These include:
- Action step(s): What will happen
- Person(s) responsible: Who will do what
- Date to be completed: Timing of each action step
- Resources required: Resources and support (both what is needed and what's available )
- Barriers or resistance, and a plan to overcome them!
- Collaborators: Who else should know about this action
Here are two examples of action steps, graphed out so you can easily follow the flow:
Of course, once you have finished designing the strategic plan or "VMOSA" for your organization, you are just beginning in this work. Your action plan will need to be tried and tested and revised, then tried and tested and revised again. You'll need to obtain feedback from community members, and add and subtract elements of your plan based on that feedback.
Everyone has a dream. But the most successful individuals - and community organizations - take that dream and find a way to make it happen. VMOSA helps groups do just that. This strategic planning process helps community groups define their dream, set their goals, define ways to meet those goals, and finally, develop practical ways bring about needed changes.
In this section, you've gained a general understanding of the strategic planning process. If you believe your organization might benefit from using this process, we invite you to move on to the next sections of this chapter, which explain in some depth how to design and develop your own strategic plan.
Concerns Report Handbook: Planning for Community Health
The Free Management Library presents a thorough guide to strategic and action planning, plus links to online discussion groups.
Imagining Our Dream Community provides guidance for visualizing your organization's ideal community.
Preventing Adolescent Pregnancy: An Action Planning Guide for Community-Based Initiatives
Preventing Adolescent Substance Abuse: An Action Planning Guide for Community-Based Initiatives
Preventing Child Abuse and Neglect: An Action Planning Guide for Community-Based Initiatives
Preventing Youth Violence: An Action Planning Guide for Community-Based Initiatives
Promoting Child Well-Being: An Action Planning Guide for Community-Based Initiatives
Promoting Health for All: Improving Access and Eliminating Disparities in Community Health
Promoting Healthy Living and Preventing Chronic Disease: An Action Planning Guide for Communities
Promoting Urban Neighborhood Development: An Action Planning Guide for Improving Housing, Jobs, Education, Safety and Health
Reducing Risk for Chronic Disease: An Action Planning Guide for Community-Based Initiatives
The Ruckus Society offers an Action Planning Manual that discusses strategies for nonviolent direct action.
Strategice Plan information page from Implementation Matters.
The Strategic Planning Process outlines 8 steps to developing a customized strategic plan for a coalition.
Work Group Evaluation Handbook
Your Action Planning Guide for Promoting Full Community Participation Among People with Disabilities , a resource for independent living centers and other community-based initiatives, from the KU Research & Training Center on Independent Living and the KU Center for Community Health and Development.
Youth Development: An Action Planning Guide for Community-Based Initiatives
Barry, B. (1982). Strategic planning workbook for non-profit organizations . St. Paul, MN: Amherst H. Wilder Foundation.
Bryson, J. (1988). Strategic planning for public and nonprofit organizations: A guide to strengthening and sustaining organizational achievement . San Francisco: Jossey-Bass Publishers.
Coover, V., et al. (1985). Resource manual for a living revolution: a handbook of skills & tools for social change activists . Philadelphia: New Society Publisher.
Fawcett, S., Paine, A., Francisco, V., Richter, K.., Lewis, R., Williams, E., Harris, K., Winter-Green, K., in collaboration with Bradley, B. & Copple, J. (1992). Preventing adolescent substance abuse: an action planning guide for community -based initiatives . Lawrence, KS: Work Group on Health Promotion and Community Development, University of Kansas.
Fawcett, S., Schultz, J., Francisco, V., Cyprus, J., Collie, V., Carson, V., & Bremby, R. (2001). Promoting urban neighborhood development: An action planning guide for improving housing, jobs, education, safety and health, and human development . Lawrence, KS: Work Group on Health Promotion and Community Development.
Halfon, N., Inkelas, M., Rice, T., Sutherland, C., Tullis, E., & Uyeda, K. (2004). Building State Early Childhood Comprehensive Systems. Volume 6: A Strategic Planning Guide for State-Level Early Childhood Systems-Building Initiatives: From Resources to Results for Young Children and Their Families. Los Angeles: UCLA Center for Healthier Children, Families, and Communities.
Kansas Health Foundation. VMOSA: An approach to strategic planning . Wichita, KS: Kansas Health Foundation.
Lord, R. (1989). T he non-profit problem solver: a management guide . New York, NY: Praeger Publishers.
Murray, E., & Richardson, P. (2002). Fast Forward: Organizational Changes in 100 Days . New York, NY: Oxford University Press.
Olenick, J., & Olenick, R. (1991). A non-profit organization operating manual: planning for survival and growth . New York, NY: Foundation Center.
Stonich, P. J. (1982). Implementing strategy: making strategy happen . Cambridge: Ballinger Publishing Company.
Unterman, I., & Davis, R. (1984). Strategic management of not-for-profit organizations . New York, NY: CBS Educational and Professional Publishing.
Watson-Thompson, J., Fawcett, S.B., & Schultz, J. (2008). Differential effects of strategic planning on community change in two urban neighborhood coalitions . American Journal of Community Psychology, 42, 25-38.
Wolff, T. (1990). Managing a non-profit organization . New York, NY: Prentice Hall Press.
Wolff, T. (2010). The Power of Collaborative Solutions: Six Principles and Effective Tools for Building Healthy Communities . San Francisco: Jossey-Bass.
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How to create an effective Business Plan – Step by Step Approach
- August 14, 2020
In this creative world everyone has an impressive idea that could take the business world by storm. But turning a business idea without a business plan into an actual business is a different ballgame right?
Since decades, we have seen that when you approach with a business idea without a business plan and no one will entertain you. It’s like shooting an arrow in the dark.
Even your friends and family, or the angel investors would run away and not take you seriously. Having a plan will help you gauge the feasibility of your Business Idea
There is a simple motto in Business – Where there is a Plan, there is a way
Every entrepreneur and startup company needs a plan. Before deciding its outline and how to create it, there are some critical questions to answer and factors to understand.
You may think you’re ready to launch a startup. That’s great news, and you should be excited about it. But what is the first step?
Knowing how to create a good business plan guides you through each stage managing your entire business and understands different aspects of it. Business plan acts as a roadmap for how to structure, run, and grow your new business.
The perks of a good business plan is that it can help you get funding or bring on new business partners. Investors also feel confident they see a return on their investment with facts and figures.
Your business plan is simply a tool you use to convince people who might work with you or invest in your company.
Sometimes with great timing, solid business foundation, entrepreneurial drive, a little luck , some founders build a business without creating even an informal business plan. Don’t be one of them because the odds of these entrepreneurs failing are greater.
But does a business plan make startup successful? Absolutely not. But with great planning and preparation it does make a difference between success and failure right?
Search Active-Investors Across The World At One Place and Get Funding For Your Startup Today.
When it comes to your entrepreneurial dreams you should do everything possible to set the stage for success.
Writing a business plan takes you to every step of starting your company so you can better prepare and handle any challenges that will come afterwards.
Different companies require different types of business plan; it depends on your financial model, your revenue structure and many more factors.
Therefore before you start seeking legal advice, renting office space, forming an LLC or meeting investors you need to put your thoughts on paper and create an outstanding unmatched business plan.
This is with each line so appealing that investors are keen to know when the date of investment is.
Types of Business plan :
Traditional business plan.
This type of plan is very detailed, takes more time to write, and is comprehensive. Lenders and investors commonly request this plan.
Lean startup plan
This type of plan is high-level focus, fast to write, and contains key elements only. Some lenders and investors may ask for more information.
Business plan examples you must read before you create your own:
Here are four real life business plan examples which will get you prepare to make your next business plan.
While you may use your business plan to attract investors, partners, suppliers, etc… Always remember you are here to make a change, the goal of your business plan is to convince you that your idea makes sense.
Remember it’s your idea, you time, your money, and ultimately your effort which on the line.
A Simple yet effective business plan Format:
In this complex business world you will get thousands of Business plan outlines. Get one of the simplest and most effective business plan outline which is easy to create and exactly what investors need when he is reading a Business Plan.
The formats are many, so it is imperative that you choose the right ones, pertinent to your idea. You must look for the right examples of business Plan to gain an understanding.
A good Business Plan Template will help you get clarity on your corporate strategy.
Creating a business plan can:
- Help you discover any weaknesses in your business idea so you can address them before you open for business.
- Identify business opportunities you may not have considered and plan how to take advantage of them.
- Analyze the market and competition to strengthen your idea.
- Give you a chance to plan strategies for dealing with potential challenges so they don’t derail your startup.
- Convince potential partners, customers and key employees that you’re serious about your idea and persuade them to work with you.
- Force you to calculate when your business will make a profit and how much money you need to reach that point, so you can be prepared with adequate startup capital.
- Determine your target market and how to reach them.
Writing a Business Plan is as important as drinking water to live:
Have an exquisite idea in mind that will change millions of life? Let’s write a business plan then.
Important here is to break your idea into different parts. Let’s focus on writing a business plan:
Have an appealing executive summary:
This section will explain what your business does, where you want to take your business in next 3-5 years and why you’ll be successful.
Keep this section short and not more than 1 page because you still have plenty of time to get into the details later. At this point it’s important to show readers what they’re getting into and why need to consider this Business plan over other business plans.
Add Company overview:
Although this step kind of sound similar to executive summary, the company overview gives a bird view of your business and what you do. It is also necessary to answer questions like:
What does your business do?
Where do you fit in? (Industry and marketplace of your business)
What is the legal structure of your business? (S-Corp or C-Corp, or LLC)
This section should also not be explained in detail. Make sure that this company overview gives a quick—but catchy—pitch about what you do, who you serve, and why you’ll be able to serve them.
The point here is to keep the reader interested and keen to know more.
Perform your Market Analysis:
The purpose of the market analysis is to make investors confident about you and the business owner have an in-depth understanding of your industry, market, and competitors.
To show this understanding, your market analysis should include the following sections:
The reader must get look into your industry. Show how big it is, how it is growing rapidly compared to past and how are industry leaders predicting it will grow in the future also important trends and characteristics and skillsets. List out the top league players in your industry.
Target market overview:
Here provide insights and solution about your target market. Some important questions to consider are:
How big your target market is?
Who are the customers in your target market, and what are their needs?
Who is currently trying to serve those needs?
Where is your target market located?
What’s the key demographic you’re serving?
Therefore by conduction market research you can also give the best estimate of how you should be pricing your product/service.
Additionally also include barriers to enter the market and competitors research. Considering so much of data, research, and amount of information involved in this section, this section may take the longest.
However this section is very crucial to your overall business plan, therefore it is important to make sure it contains all the necessary details.
This is because a well-researched plan will show readers that you’re knowledgeable and have done homework about your target market and your business.
Define your business organization:
This section shows your organization’s expertise in your business domain.It explains who does what in your business and background of staff.
Organization structure, Ownership structure also needs to be added in this section to show who is owner of company, and different stakeholders who are involved in the company.
Also show background of entire staff right from top management this will highlight what your team will be bringing on table in terms of experience.
Core service of business:
This section will have complete description of your product/service. Therefore make sure you highlight your product/service in such a way that it is different from the competitors.
Also if you rely on different vendors/manufacturers who will be providing you product/service it’s important to add in business plan.
Sales and Marketing plan:
Till now you have given crucial information of your product/service and what you will be offering to market. But now let’s see how you will offer.
The first step is to show how you are going to showcase your product or position it? Because the way you position your brand will eventually determines how customers find and interact with you. So mentioned in business plan whether:
Are you a free service?
Does your service guarantee quality? If yes what is duration?
This explains your positioning in the market.
Explain how you are going to reach your customer. By which medium and process, so explain if currently you have any plans for packaging the product and how will you advertise the product.
Advertising can be done through offline or online medium. Depending on your product find out the most useful channel for advertising your product.
Explain sales plan and if possible explain sales procedure you will be using. Showing the expertise of Sales will make investor know your experience because Sales makes you profit and sales gets you going. Sales is the fuel if business journey.
Although you might not know exactly how your sales and marketing will turn or which channels will be most successful, nevertheless you should give a clear and concise overview of how you plan on selling your product.
This is because preparation shows that you are well aware of future and shows your confidence.
Financial Plan and Projections:
Consider this is most important part of the entire document. With this step you’ll detail your financial plan & projections, depending upon current state of your finances and mapping where you will be need of finances.
Financial projections are either supported by past data, or determined by research and analysis on the industry and top competitors.
You need to include these essential documents:
- Statements of projected income
- Cash flow forecasts
- Balance statements
- Capital expenditure budgets
- The last part of financial plan should include whether you need any funding right now or in future.
- It’s important to mention whether you plan to get funding through equity financing with angel investors or venture capital firms, or through debt financing with small business loans.
- This information of financial plan will get idea to investor about how his financial contribution makes impact on business and ultimately his ROI.
Although the appendix will be at the very end of your business plan, it will have all the supporting information you didn’t include in your document.
Like if have any additional data points, charts, footnotes, or further explanations that are essential to creating a complete plan. You can also add any contracts, legal documents, permits, and product pictures which is not included elsewhere.
Appendix begins with a table of contents that breaks entire section of your business plan, followed by the supporting information to each section.
Small Business Plans Explained
In it’s simplest form, a business plan is a document that outlines the basics about your business, products, and services; the market you are targeting; the goals you have for your business; and how you will achieve those goals.
A business plan is one of several important plans you should have when you are starting a business, the others being a marketing plan and a financial plan.
Your business plan should pull all three of these plans together, incorporating elements of your marketing plan and your financial plan into a comprehensive document.
Think of your business plan as a map or blueprint that will guide your business from the start-up phase through establishment and eventually business growth.
Why You Really Do Need a Business Plan
Reasons for having a Business Plan vary by the type of business you are starting and your intention to use it. But the common thread for all businesses is that a business plan Outline is necessary.
After all, how can you get your business launched and thriving without any type of written plan to help you?
Some of the reasons you need a small business plan that may apply to you include:
It is essential when you apply for a bank loan, pitch your business to investors, or bring in business partners.
You won’t truly be able to qualify your business idea without understanding your target market, researching the competition, and conducting a feasibility analysis — all parts of a business plan outline.
A good small business plan not only outlines where you are and where you want to be, but also helps you identify the specific actions you need to take to get there.
A business plan can provide essential background information and Business strategy. It showcases culture to employees, including managers and staff, as your business grows.
The financial section of your business plan can be the basis of your business budget. It is a useful tool for managing cash flow on a monthly basis.
So, you know you need a business plan. The next question to consider is what type of plan is the best fit for your small business.
A business plan still plays a critical role in launching a profitable and sustainable venture today. New data shows us that the best time to complete a robust plan may now come later in the journey than it used to.
It is much more important to get started, test and secure funding first.When it comes to business plan outline, there are now more templates and streamlined formats available to meet today’s needs to accommodate faster moving, leaner startups.
Just don‘t let this part of the process slow you down. No matter how you do it, make sure to have someone with experience review it for you.
Take a look at Alcor’s free reports on Venture Capital funding analysis . So, get your business assessed on our high-end AI platform to get maximum results and funding from our global investors
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5 Top Vision Statement Examples For Your Business Plan
Free Mission and Vision Statement Templates
Example 1: A vision statement by Microsoft
To help people and businesses throughout the world realize their full potential.
Microsoft Corporation is an American multinational technology company with headquarters in Redmond, Washington. It develops, manufactures, licenses supports, and sells computer software, consumer electronics, personal computers, and related services. Its best-known software products are the Microsoft Windows line of operating systems, the Microsoft Office suite, and the Internet Explorer and Edge web browsers. Its flagship hardware products are the Xbox video game consoles and the Microsoft Surface lineup of touchscreen personal computers. Microsoft ranked No. 21 in the 2020 Fortune 500 rankings of the largest United States corporations by total revenue; It was the world’s largest software maker by revenue as of 2016. It is considered one of the Big Five companies in the U.S. information technology industry, along with Google, Apple, Amazon, and Facebook.
Information Courtesy: Wikipedia
Ratings by experts: 4 / 5
- This mission statement communicates the intention of the empowerment of people and organizations.
- It also indicates the vision of catering to the world’s unity and productivity.
- However, the [How] is missing.
Example 2: A vision statement by Harley Davidson
Harley-Davidson, Inc. is an action-oriented, international company, a leader in its commitment to continuously improve our mutually beneficial relationships with stakeholders (customers, suppliers, employees, shareholders, government, and society). Harley-Davidson believes the key to success is to balance stakeholders’ interests through the empowerment of all employees to focus on value-added activities.
Harley Davidson , Inc. is the fifth-biggest motorcycle manufacturer of heavyweight motorcycles in the world.
- The mission statement shows the company is looking forward to expanding its business. Moreover, they have shown interest in the stakeholder’s leadership.
- No user benefit is shown.
Example 3: A vision statement by Google LLC
To organize the world’s information and make it universally accessible and useful.
Google LLC is an American multinational technology company that specializes in Internet-related services and products, which include online advertising technologies, a search engine, cloud computing, software, and hardware. It is considered one of the Big Five technology companies in the U.S. information technology industry, alongside Amazon, Facebook, Apple, and Microsoft.
Ratings by experts: 5 / 5
- Clear communication on the intention.
- Short, simple, and catchy.
- Relevant to the audience and their services.
Example 4: A vision statement by KFC in the year 2013
To sell food in a fast, friendly environment that appeals to price-conscious, health-minded consumers…
KFC stands for Kentucky Fried Chicken. It is an American fast-food restaurant chain headquartered in Louisville, Kentucky, that specializes in fried chicken. It is the world’s second-largest restaurant chain after McDonald’s
Ratings by experts: 3 / 5
- Clear mention of the target customer.
- Can’t be used for branding purposes.
- The reason why the statements fall back is that their actions as a brand did not completely align with their mission.
Example 5: A vision statement by Unilever
To make sustainable living commonplace. We believe this is the best long-term way for our business to grow.
Unilever plc is a British multinational consumer goods company headquartered in London, England. Unilever products include food, confections, energy drinks, baby food, soft drinks, cheese, ice cream, tea, cleaning agents, coffee, pet food, bottled water, toothpaste, chewing gum, frozen pizza, pregnancy tests, juice, margarine (Upfield), beauty products, personal care, breakfast cereals, pharmaceutical, and consumer healthcare products. Unilever is the largest producer of soap in the world. Unilever’s products are available in around 190 countries.
Information courtesy: Wikipedia
- This statement targets the current requirement of the world community. Which is very relevant to the industry in which the company serves.
- This is a long-term vision and can even concrete vision statement
- Good use of vocabulary.
About the Author
Since childhood, I was in awe of the magic that words bring. But while studying computer science in college, my world turned upside down. I found my calling in being a copywriter and I plunged into a world of words. Since then, there is no looking back. Even today, nothing excites me to find out the wonders the words can bring!
How to Write an Effective Company Overview for Your Business Plan
Write a Mission Statement For Your Business Plan: Explained with Examples
How to Write a Vision Statement for Your Business
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