Business plan success in today’s multi-trillion dollar green economic revolution is determined by how successfully it fulfills the customer’s search for products that align value with values. If you are a retail business then your business plan must align with the millennial generation’s focus upon sustainable business practices in deciding what companies to buy from and who to work for. The business plans for businesses that sell to other businesses must articulate how their bids competitively satisfy Corporate America’s green supply chain procurement criteria. Every business plan must address a company’s sustainability practices for managing commodity price volatility and supply chain disruptions impacted by climate change.
Part One of this article series on how to write a green business plan focused upon the elevator speech. I focused first upon the elevator speech because a business that can compellingly explain their opportunity in three sentences has the vision for crafting a winning business plan attractive to investors, work associates and customers. This first article outlined the steps for writing an elevator speech. This second article outlines the steps for writing a successful green business plan.
A business plan validates the elevator speech
It is one thing to paint a compelling elevator speech. It is an entirely more complex task to validate that your vision can be realized. Your business plan must validate the elevator speech. A bold and compelling elevator speech will attract attention. A realistic and well thought-out business plan is the tool for converting interest into a commitment by an investor, work associate or customer.
A well executed business plan answers through documentation the questions, issues and doubts that potential investors, work associates or customers will have on your company’s strategy, human resources requirements, capital requirements and product competitiveness. The following is a list of issues that every business plan must address through realistic documentation:
- How real is this business opportunity? Have many customers have already bought what you are selling?
- What is revenue size of the business opportunity?
- How will your business survive competition or overcome barriers to entry?
- How will the company recruit the human resources to execute the business plan?
- Are your financial projections realistic and well documented?
- What are your capital requirements to support financial growth? Is the amount of funding you seek realistic? How many rounds of fund raising will be needed to achieve sustained business operations?
Business plan format
The business plan format I use is based upon the approach of “tell them what you are going to tell them, then tell them and conclude by telling them what you told them.” It consists of the following chapters:
- Summary Page. One page that outlines the who, what ,where and how of your three sentence elevator speech. The first paragraph of the summary is your three sentence elevator speech.
- Opportunity. Define market scale, target customers and how you win customers.
- Human resources plan. Identify key leaders. Outline how the business will attract and groom the human resources talent required to fulfill mission critical steps.
- Competitive landscape. Identify the competition. Explain how your company will win against them. Identify how you will overcome barriers to entry created by existing competitors.
- Financial projections. The numbers in terms of projected sales, costs, gross margin, overheads and pre-tax margins.
- Spreadsheets. Provide spreadsheets that document your financial projections. Design the spreadsheets to enable a potential investor to test changes in your key assumptions.
- The “Ask.” If your business plan seeks new capital then provide a summary page that explains what amount of money you are raising and the intended uses of fund. Provide the legal document that supports the form of funding you seek. This section also summarizes for the investor the growth in sales and/or profits that will be derived from the investment.
This format has another benefit. It enables telling your business story in just six slides (Financials are not included in the six slide presentation. Financials are best presented in an Excel format designed to enable scenario analysis).
What does green mean to your business plan?
Never lose sight that investors invest to make money and that customers buy based upon comparative value. Trying to win an investment or customer solely based upon creating a greater good is a tough sell. However, a business that can deliver a triple bottom line result for profit, people and planet will have a competitive advantage in attracting investors, work associates and customers.
In terms of investors, they increasingly recognize that successful companies win customers by delivering on both value and values. They also recognize that Corporate America is greening their supply chain and they search business plans for evidence a company can competitively bid on contracts that now include sustainability and corporate social responsibility bid criteria. Investors are risk adverse to commodity price volatility, supply chain disruptions and increased government regulations. A business plan that sustainably mitigates these risks has a competitive advantage that will be attractive to investors.
Solar industry case study
The solar industry provides an interesting example in developing a business plan. For twenty years the industry held little interest for most investors. It was a niche technology selling to the greenest of customers.
Then came the vision of companies like Solar City, SunRun, Clean Power Finance and SunPower. They developed a mass marketing business plan for solar. Their paraphrased elevator speech to homeowners was “buy solar for zero down and immediately lower your electric bill.” To investors their elevator speech was “We will built a hundred billion dollar industry selling electricity from rooftop solar systems that will lower or eliminate a homeowner’s electric bill.” Those are engaging and compelling elevator speeches! Imagine the business plan that was used to raise the funds to realize that vision.
That is the challenge for every business plan. Most of us are not Elon Musk, founder of Solar City and Tesla, with a disruptive vision. But whether your business is an auto body shop or a Fortune 500 corporation the path to revenue growth is through delivering disruptively priced products that solve “in me, on me and around me” problems. A compelling green business plan that is price competitive while also meeting the sustainability expectations of your target customers creates a tremendous opportunity for raising capital, attracting talented human resources and winning customers.
Bill Roth is an economist and the Founder of Earth 2017. He coaches business owners and leaders on proven best practices in pricing, marketing and operations that make money and create a positive difference. His book, The Secret Green Sauce, profiles business case studies of pioneering best practices that are proven to win customers and grow product revenues. Follow him on Twitter: @earth2017