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Writing and Building a Business Plan Your PEO Roadmap from Inception to Exit

PEO Insider

In today’s world, most people use some type of GPS to tell them how to get from Point A to Point B. My boys, ages 20 and 22, get so embarrassed when I print directions. Granted, I am not a technology wizard—but when something is in writing, in front of me, glaring at me from the dashboard, written step by step, I pay more attention.

Much like a GPS (or printed directions if you prefer), a business plan is a written document that identifies where you start, where you want to go, and how you will get there. While a business plan is strategic, tactical implementation is critical. Listed below are some of the key components of your PEO roadmap from a start-up perspective. “is list is not all-inclusive, but let’s go ahead and start our trip!

An Executive Summary

This paints a picture of your overall company. While short and concise, this section specifies why your PEO is different from others. It identifies strategic goals and objectives, and most importantly, summarizes your mission, vision, and values. For example, do you want to over HR administration or HR strategic planning, or both? Is your strategy to grow slowly and cautiously or to ramp up the business quickly?

Market Analysis

Once you know what you want to be when you grow up, it is necessary to research the market, region, products, services, and competitors compared to your specific goals and objectives. Do you operate in an area where there are 10 PEO companies within 10 miles and competition seems principally based on price or in an area where PEOs are less known and education is required? Who are your competitors? What are the legislative issues in the states where you hope to do business?

Organization and Management

Teams of people provide PEO services—customer service is critical. What does your organizational chart look like? Will you hire SPHR professionals, payroll specialists, bene!t administrators? This section of the plan identifies each job description and skill set in detail.

Product Line

What products will you provide? From payroll, workers’ compensation, 401(k), to HR strategic planning and training and development, there are many product options. This section explains which ones you will provide.


This is a critical component in today’s PEO. What will your system need to do to provide the products and serve your clients? Should your system integrate with other systems? Will you build an internal technology staff or outsource this function? Do you want a system that will take you to 2,000 worksite employees or one that will grow with you to a much larger size?

Sales and Marketing

This portion of the plan identifies precisely how you will grow your PEO via sales and marketing. Will the CEO sell, will you sell via PEO brokers, or will you hire a sales and marketing team? How will you pay and train those individuals?

Baseline Financials

How do you intend to make money (income) and how will you price your products? What will your balance sheet and pro!t and loss statement look like? Do you intend to borrow money (funding requirements) or will you capitalize the company with shareholder money? Are you and your shareholders okay breaking even for the first few years, or do they require an immediate return on investment?

Financial Projections

This is the “Where am I going?” part. Your plan should include financials that realistically take you from inception out to the five-year mark, if not further.

Much like your current GPS (and my printed directions), the initial business plan will soon be obsolete. The plan must account for changes, be reviewed on a regular basis, revised, re-written as needed, reviewed again, and revised…again! Even if it just sits on your dashboard, you have a roadmap!