Your executive summary is the first part of your business plan, but you usually write it last because it is a summary of the most important parts of your plan.
The point of your Executive Summary is to get the reader’s attention quickly. Tell them what kind of HR consulting business you run and what its current status is. For example, are you a new business, do you want to grow your HR consulting firm, or do you have HR consulting firms in more than one market?
Next, give an overview of each part of your plan that follows. For example, you could give a short summary of the HR consulting industry. Talk about the kind of HR consulting business you run. Detail your direct competitors. Tell us about your ideal customers. Give a brief overview of your marketing plan. Find the important people on your team. And explain what your financial plan is.
In your company analysis, you’ll describe the type of HR consulting business you run.
For example, you might run one of the following types of human resources consulting businesses:
- Human Capital Strategy: This type of business focuses on strategic issues such as corporate culture, diversity, and organization design.
- Compensation & Benefits: This type of business involves analyzing and consulting on all aspects of employee pay, from base pay to secondary benefits, pension, and retirement.
- Talent management is a type of business that focuses on finding and keeping talented people, as well as developing their skills.
- Professional Development: This type of business offers a wide range of services, from coaching and training for leaders to building learning management systems.
In the Company Analysis section of your business plan, you need to explain what kind of HR consulting business you will run and give background information about the business.
Include answers to things like:
- When did you start your business, and why?
- What important steps have you taken so far? Milestones could be things like how many websites were launched, what kinds of websites were built, etc.
- Your legal structure. Are you set up as an S-Corporation? An LLC? A single-person business? Tell us about your legal structure.
In your industry analysis, you should give an overview of the HR industry.
Even though this may seem pointless, it has more than one use.
First, learning about the HR industry gives you knowledge. It gives you a better idea of the market you are in.
Second, market research can help you make your strategy better, especially if it shows you market trends.
The third reason to do market research is to show your readers that you know a lot about your field. You do just that by doing the research and putting it in your plan.
In the industry analysis section of your HR consulting business plan, you should answer the following questions:
- How much money does the human resources industry make?
- Is the market going down or up?
- Who are your main rivals in the market?
- Who are the main market suppliers?
- What changes are happening in the field?
- How fast is the industry expected to grow in the next 5–10 years?
- How big is the market that matters? That is, how big is the market for your business that helps companies with their human resources? You can figure out such a number by figuring out how big the market is in the whole country and then applying that number to the population in your area.
In the section of your business plan about your HR consulting business called “Customer Analysis,” you must describe the customers you serve and/or plan to serve.
Companies that provide financial services, government agencies, healthcare institutions, and technology companies are all examples of customer segments.
As you might guess, the type of human resource consulting business you run will depend a lot on the customer segment(s) you choose. Obviously, marketing campaigns for government agencies would be different from those for technology companies.
Try to figure out who your ideal customers are based on how they look and how they think. In terms of demographics, talk about the ages, genders, locations, and levels of income of the customers you want to serve. Most HR consulting businesses mostly work with people in the same city or town, so it’s easy to find demographic information on government websites.
Psychographic profiles explain what your target customers want and need. The better you can understand and define these needs, the easier it will be to get customers and keep them coming back.
In your competitive analysis, you should list your business’s direct and indirect competitors and then focus on the direct ones.
Other human resource consulting firms are direct competitors.
Indirect competitors are other places where customers can buy things that aren’t direct competitors. This includes both more general management consultants and HR teams that work in-house.
In terms of direct competition, you should talk about the other HR consulting businesses that you are in direct competition with. Most likely, the closest businesses to you that offer human resource consulting services will be your direct competitors.
Give an overview of each of these competitors’ businesses and list their strengths and weaknesses. Unless you’ve worked at one of your competitors’ companies, you won’t know everything about them. But you should be able to find out key facts about them, such as:
- What kind of clients do they work with?
- Do they focus on certain fields, like healthcare, technology, etc.?
- How much do they charge (high, low, etc.)?
- What can they do well?
- What do they do wrong?
For the last two questions, try to answer them from the customers’ point of view. And don’t be afraid to ask the customers of your competitors what they like and dislike about them.
The last part of your competitive analysis section is to list the ways you are better than your competitors. As an example:
- Will you offer a wider range of services or services that are more specialized?
- Will you offer options for virtual services?
- Will you provide superior customer service?
- Will you price things better?
Think about how you will do better than your competitors and write them down in this part of your plan.
Usually, a marketing plan has four parts: the product, the price, the place, and the promotion. Your marketing plan for a human resource consulting business should include the following:
Product: In the product section, you should repeat the type of HR consulting company you wrote about in the Company Analysis. Then, give specifics about the products you’ll be selling. For example, does your HR consulting business offer compliance consulting in addition to strategic consulting?
Price: Write down the prices you’ll be charging and how they compare to those of your competitors. In your marketing plan, the product and price sections are basically where you list the services you offer and how much they cost.
Place: This is where your business is located. Write down where you are and how that will affect your success. For example, will you have a physical office or will you mostly deal with clients online and/or at their place of business? In this part, talk about how where you are will affect how many people want your services.
The last part of your marketing plan is the section on promotions. Here, you’ll write down how you’ll get people to your location (s). Here are some ways you could promote your business:
- Putting ads in newspapers and magazines in your area
- Contacting local websites
- Billboards and signs
- Marketing with social media
- Local radio advertising
In the other parts of your business plan, you talked about your goals. In your operations plan, you talk about how you will reach those goals. Your plan for operations should have two separate parts.
Everyday short-term processes include all the tasks you need to do to run your HR consulting business, such as marketing, giving consultations, building analytics processes, making and presenting recommendations, etc.
Long-term goals are the goals you want to reach in the future. Some of these dates could be when you plan to sign your 50th consulting contract or when you hope to make $X. It could also be when you want to open a new office for your HR consulting business.
For your HR consulting business to show that it can be successful, you need a strong management team. Showcase the backgrounds of your key players, focusing on the skills and experiences that prove they can help your business grow.
The best case scenario is that you and/or your team members have direct experience in human resources and/or running HR consulting businesses. If so, talk about your experience and skills. But also highlight any experience you think will help your business succeed.
If your team is missing something, you might want to put together an advisory board. A two-to-eight-person advisory board would help your business in the same way that a mentor would. They would help answer questions and give advice on how to plan. If you need to, try to find advisory board members who have worked in Human Resources or run small businesses well.
Your 5-year financial plan should include a monthly or quarterly breakdown for the first year, then an annual breakdown after that. Your income statement, balance sheet, and cash flow statement are all part of your financial statements.
A more common name for an income statement is a Profit and Loss statement, or P&L. It shows your income and then takes away your expenses to show if you made a profit.
You need to make assumptions in order to make your income statement. For example, will you work on one client at a time, or will you have teams working on multiple projects at once? And will sales grow by 2% or 10% every year? As you might expect, the financial forecasts for your business will be greatly affected by the assumptions you choose. Do as much research as you can to try to make sure your assumptions are true.
Balance sheets show both your assets and your debts. Balance sheets can have a lot of information, but try to boil them down to the most important parts. For example, if you spend $50,000 to build up your business, you won’t make money right away. Instead, it is an asset that you can use to make money for years to come. Likewise, if a bank gives you a check for $50,000, you don’t have to pay it back right away. Instead, you will have to pay that back over time.
Cash Flow Statement: Your cash flow statement will help you figure out how much money you need to start or grow your business and make sure you never run out of cash. Most business owners and entrepreneurs don’t realize that you can make money but still go bankrupt if you run out of money.
When making your Income Statement and Balance Sheets, be sure to include some of the most important costs of starting or growing an HR consulting business:
- Setup of an office
- The price of buying or renting a company car
- Costs of office supplies such as computers and software
- Payroll or salaries given to employees
- Insurance for businesses
- Taxes and licenses:
- Legal expenses