Gravity Payments

Building a Business Plan for 2024 in 3 Simple Steps

Building a business plan for 2024 is one of the simplest ways to grow your business, improve cash flow, and receive outside funding (if necessary). For many small business owners, building a business plan is a daunting task. But it’s actually not that difficult. Research has shown that you might not need a 40-page traditional plan these days. In fact, a one-page document is sometimes enough for small businesses (we’ll cover this later). In this guide to building your 2024 business plan, we’ll show you how to build a lean business plan in just 3 simple steps.

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First: Why Build a Lean Business Plan in 2024?

Creating a business plan for 2024 is not just about “checking a box.”  Going through the process of writing the plan is likely to benefit your small business.

For example, taking the time to review previous performance, your target market, your value proposition, and other key business data points usually leads to directly actionable business insights that could improve performance both immediately and in the long-term. That’s the key value of going through this process.

Research has reached a key conclusion: businesses that plan succeed more than those that don’t.

Here are a few statistical insights that show the value of proper planning:

But it’s not just having the plan that matters – it’s the quality of the information contained within that plan. What’s particularly important is  defining your value proposition and ensuring that everyone understands your raison d’être or purpose of being.

Another fascinating study showed that in highly dynamic environments, entrepreneurs should consider speeding up the planning task. Small businesses (both online and physical) could benefit from clearer, shorter plans for a few reasons:

  1. They take far less time, freeing up you and your team to focus on growing the business.
  2. They’re easier to adjust.
  3. They paint a clearer picture of your business and allow you to glean actionable data faster.

Even established businesses that have never taken the time to create a business plan can benefit from creating one, especially a shorter one. This ensures everyone will read it and that everyone can get on the same page quickly.

NOTE: Shorter plans benefit smaller, younger companies. However, you may want a longer plan if you are very detail-oriented or plan to apply for funding from traditional sources like a bank.

So, let’s cover how to create a short business plan for 2023 that will help you grow and remain focused.

Key Tips for Planning Before Making Your Plan

Before we get to the key information needed for your 2024 business plan, we’d like to cover a few crucial tips for planning. We find that small business owners tend to make a few key mistakes that reduce the quality of their plans or even prevent them from making plans altogether. With these tips, you’ll produce a much clearer plan of action that’s easy to follow for you and your team.

1. Remember, You Can And Should be Coming Back

Small business owners often deal with “writer’s block” when creating business plans. There’s this inner perfectionism urge that drives many writers to want to get it right the first time.

However, a better approach is to see your plan as a living, breathing document that you should be constantly improving. Planning and growth are an iterative process. With that in mind, don’t get stuck on any one area or think it needs to be perfect. It doesn’t.

If you’re having trouble, skip it and come back later. Or, if you don’t believe you have enough data to make a definitive statement, take the time to research and then come back.

2. Stick to Short Sentences and Bullet Points

It’s important to remember that a business plan is a practical document for you and your team to glean important information, set goals, and evaluate performance.

Keep it short, concise, and value-driven. Don’t use large words, long sentences, or unneeded paragraphs.

3. Stick to Only the Highest Value Content

Mission statements, biographies, and detailed marketing plans look nice, but they are mostly just window dressing. 

Sure, it’s good to know which direction you’re going in, but lenders funding your business are likely to care more about your financial statements than your mission statement.  

How to Create a Lean Business Plan for 2024 in 3 Simple Steps

Step 1) Reflect on 2023 and Use That Information to Improve

A common mistake we see small business owners making when it comes to planning is not looking enough at the previous year.

Experience is your best teacher. We understand that a “2024” plan sounds like it should only be about next year, but your previous year in business is where you’ll find a lot of valuable information.

But don’t worry, there’s a very simple and fruitful way to do it.

Look back on 2023 and see what you did well and what you did poorly. Go into as much detail as you can, but separating outcomes into these two simple buckets is enough to set you on the path toward success in 2024. Less is more sometimes.

Here are a few things to consider:

  • Did you reach your sales goals? Why or why not?
  • What did your customers like and dislike in their reviews?
  • Survey your team/staff and record positive and negative feedback.
  • Which marketing channels brought the most success and which ones didn’t work?
  • Did you grow at all? What caused that?

After you see what’s working and not working, you’ll know where to focus your efforts for 2024 instead of relying on gut feeling.

For example, if your social media ads are converting well, you’ll know to scale up ad spend.

Record this information in a document or on a whiteboard – whichever you prefer. It will be your guide to creating the rest of the document.

Step 2) Write Down the Highest-Value Business Information

Before we get to the high-value criteria, let’s first reiterate what the goal of this plan is.

Traditional business plans for large businesses focus more on “business facts” like products and services offered, personnel, history, mission statements, and a broader executive summary. 

While you may want to briefly cover the above categories, small businesses don’t need to go into a lot of depth in those areas. Take your average restaurant, accounting business, or mom and pop bicycle shop – people are well aware of the products or services offered, who’s running the show, and how long the business has been around.

Your business plan should be much leaner and more focused on business points that bring the most value. Remember, less is more for small businesses.

With that being said, here are the data points that matter most:

  • Your value proposition: this is priority #1. If you and your team don’t know this, then it’s difficult to succeed in business. What is the main value you provide to your market? Here are a few examples:
  • Uber: one tap and you can hail a cab anywhere without haggling the price or giving your driver directions.
  • WordPress: build a website in a few hours – even if you lack web development skills.
  • Gravity Payments: accept payments anywhere at any time with solutions tailored to your business.
  • Market need: what is the key gap you’re filling in the market? For example, Uber is solving the headaches of finding a cab off the street, removing dangers, and improving efficiency.
  • Your competitive advantage: why are you better than competitors for your specific market? If you’re a bar, maybe it’s location and decor.
  • Your target market: who are you selling to? What is their location, age range, and average income? And what are their interests, hobbies, and desires?
  • Your competition: who are they? What do they do better/worse than you? How will you beat them in 2023?
  • Profitability data: include revenue and expenses in detail. Remember to include all expenses, including taxes, payroll, costs of goods sold, overhead, and credit card processing fees. Processing fees usually fall within the 2-3% range, but they depend on your provider. For a better idea of your current payment processing rates, use Gravity’s Rate Calculator. It’s 100% free.
  • Cash flow projection: this is essentially a projection of your business’ future performance. Showing cash flow statements from the previous year and a month-by-month projection for the next year could help grow your business organically and help you receive outside funding. Showing potential lenders a data-driven forecast of where your business is going is a big plus when trying to secure a business loan.
  • Key resources: this may be time consuming, but you can keep it simple if you’d like. Many small businesses’ key resources are their team and skills.
  • Marketing channels: stick to bullet points when you can. This includes affiliates, promoters, billboards, news ads, online ads, blogging, SEO, an email list, and any other marketing channels you are using. Use your 2022 analysis – if you have one – to highlight your key money makers and areas for improvement.
  • Major milestones: include the ones you did/did not achieve in 2022 and set out clear milestones for 2023. This could be something as simple as adding new team members and services or as complex as expanding into a new location.

NOTE for traditional business plans:

As mentioned earlier, you may need to create a longer, more detailed business plan if you want funding from traditional sources. In that case, you’ll want to spend more time to add some of the more traditional business plan points such as: 

  • An executive summary: this is a summary of your company including why you believe you’ll be successful, your history, the contents of the plan, and goals for 2024.
  • Company description: in this section, go in-depth about the problems you solve, how you discovered the solutions, your advantages, key resources, market, and team (including brief bios).
  • Products and services: use this section to outline your product/service offerings and any new ones you expect to add in 2024.
  • Funding requirements: if you plan to request funding, use this section to outline the amount of funding needed, evidence for that number, and your plans for how to use that funding.

Step 3) Create Goals and Write Down Evaluation Methods

What do you hope to achieve going into 2024 and how are you going to evaluate progress?

Successful businesses are constantly evaluating key metrics like:

  • Team performance
  • Customer satisfaction
  • Macro-level goals (e.g, overall growth)
  • Micro-level goals (e.g, higher ROI on ad spend)

A great place to start is monthly goal evaluation and weekly team meetings. Here are some ideas used by smaller businesses:

  • Monday team huddles where you discuss overall progress as well as the team’s daily life (to build a sense of community)
  • Weekly 1-to-1 meetings to discuss individual performance with team members
  • Setting goals for each quarter (e.g, we’re going to spend more on Facebook ads and achieve $x in sales from that channel)
  • Monthly company evaluation where you both evaluate monthly performance and set out a plan of action for the next month

It’s impossible for us at Gravity Payments to say exactly what your evaluation methods should be, since each business is so different.

However, these types of regular evaluation methods will set you in the right direction.

In addition to regular evaluation, start building a roadmap for achieving your 2023 goals. For example, “we want to reach 7-figure revenue by Q4 and we’re going to do it through social media ads and new products.”

And as always, provide as much concrete data as possible, such as average ROI on ads or average profit on a product/service.

Planning is Your Key to Success in 2024

In 2024, most small businesses won’t need a massive business plan with every bit of company data. A plan with a smaller amount of high-value data based on previous successes and failures is the best way to grow going into next year.

Remember to focus on your key data points and to constantly evaluate, outline what progress means to you, and stay focused on your team and target market.

Research has shown that creating a business plan, particularly a shorter one, is a great way for businesses to grow in 2024 by improving cash flow, identifying opportunities and shortcomings, and creating an atmosphere of accountability. 

If you’re an online business, consider upgrading merchant services going into 2024. This is actually one of the easiest wins in all of eCommerce. Potentially reducing fees, offering more payment options, and encountering fewer technical or service issues is a great way to improve cash flow, generate more business, and win more positive reviews. 

Businesses stay with Gravity’s merchant services 5 times longer than other merchant solutions. We’d be happy to jump on a free call with you to discuss your unique needs.

Best of luck in 2024, and let us know how your business plan is coming along!

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