If you are considering starting a law practice, you must consider how your firm will stand out when it comes to getting clients, attracting talent, and getting funding. A well thought-out business plan will allow you to do a number of things:
- Create clear action steps to help you achieve your stated objectives.
- Fill gaps in your current planning through identifying gray areas and obtaining advice from more experienced attorneys.
- Seek loans and other financial support to start your business.
- Ensure you and anyone who works with you will be on the same page when it comes to representing clients and pursuing firm goals.
In this series of articles, I will help you understand what a business plan is, why you need one, how to create one, and how to make it successful.
Do I Really Need a Business Plan?
This is a common question among entrepreneurs. Everyone hears that they should have a business plan, but they don’t often know why. Furthermore, most lawyers do not understand what should go into that plan or how to even create one. This leads to many new business owners forging ahead without a plan in place.
This is a mistake.
Your business plan is your roadmap to success. It requires you to put thought and effort into the foundation and future of your law firm.
Some scholars believe you don’t need a business plan to open your doors because they take time and effort to complete. Such time and effort could be focused on more practical items such as actively getting started on client work. Maybe so, but business plans are often required to get a loan or other funding, and they are an important way to gain a competitive edge over other practitioners in the field.
The Main Elements of a Business Plan
There are seven essential parts to a business plan:
- Executive summary. This provides a brief summary of your full business plan. It starts with your firm’s mission statement and core values, touches on your intended audience and services, what your overarching business goals are, and why you believe your firm will be successful.
- Company description. This covers the history of your firm, the markets you serve, how your services will meet your audience’s needs, and the competitive advantages your firm has over your competition.
- Market analysis. This section provides a summary of your research regarding your competitors and your target audience. It involves reviewing what your audience needs, whether your audience is getting what it needs right now, and what gaps you can fill by providing your services. It also includes an honest assessment of your firm’s strengths and weaknesses.
- Organization and management. From organizational and compensation structure to ownership and management profiles, this section covers all the primary aspects of your business structure and who will run operations on a day-to-day basis.
- Services. This section is a list of services you are looking to provide and the benefits of each service to your target audience.
- Marketing. This section requires you to consider how you will enter the market, how you will grow, and which communications and distribution tactics you will implement to reach your growth goals.
- Financials. From your current balance sheet and cash flow statements to your financial projections and funding requests, this section covers everything having to do with existing and future money. It includes a summary of your plans and policies regarding financial management in addition to including a picture of your current financials and your financial forecasts.
A final, optional section of your business plan is the appendix. This can include your resume, any legal documents (such as a partnership agreement or your articles of incorporation), real estate documents (if you lease or own your workspace), and a list of individuals you consult with to manage your business (including your bookkeeper, accountant and business coach).
While this sounds like a lot of information, you can keep your plan short and sweet. It does not require forty-plus pages. But it does require is clear thought, research, and well-articulated goals.
Featured image: “business plan concept” from Shutterstock.
Read the next post in this series: "How to Write Your Law Firm Business Plan."