Plan A: How to write a good business plan.
Love ‘em or hate ‘em, a business plan is one of the cornerstones of any new or expanding business - it’s simply the distilling and compiling of your knowledge into one source, either for your own reference, or for the reference of your staff or stakeholders.
Again, those immortal words: Don’t Panic.
A business plan should never be an anchor or a dead weight dragging your business down - and it should never be an onerous task to put one together.
The good news is that there are 3 wildly different types of business plans - each one focussing on a different business purpose - and one of these types of plans should suit your needs perfectly, without undue effort.
Don’t believe me? Read on…
——
Type 1: The Bottom-Drawer Business Plan
Truth be told, this is where a fair percentage of business plans end up - filed neatly under ‘B’ in the bottom drawer of the filing cabinet you use to store your tax records for 7 years.
Sometimes the business plan you’ve long since forgotten about is still highly valuable. Sometimes it’s the initial stimulus to write the plan in the first place - to organize your thoughts - that provides the best value. Sure, it hasn’t been referred to in months, but it gave you an initial focus and clarity of purpose that you’ve carried with you.
——
Type 2: The Investor/Stakeholder Business Plan
Just like the bottom-drawer business plan, this type of plan is *also* another one that probably won’t be referred to again very often - it’s another one-off, written for a special purpose. In this case, though, rather than the purpose being to focus *your* attention, this business plan is an external one: it’s intended to be presented to potential investors or possible stakeholders of your business (business partners, senior staff, advisors, board members, etc).
This type of plan is generally handed over to a graphic designer for a final spit and polish, as the style and professionalism of the document or slideshow can be just as important as the content therein. You’re often writing your plan speculatively (that is, for purpose of attracting resources, be it financial or human resources), so your presentation and your copywriting skills need to be capable of sustaining that speculative goal.
——
Type 3: The Living, Breathing Business Plan
This final type of business plan is the least common, and yet is also the most effective, long term. This type of plan is not a personal, ‘bottom drawer’ effort, nor an outward-focussed pitch for funds, rather, it is simply the method of communication of the goals and directions of your business to you and your staff. It should be a dynamic document, written in a basic word-processing package, and ’saved as’ often, so that you can easily go back to a previous version to review your goals and target markets as they change over time.
This type of document should be easily accessible to all senior staff in your business, so that everyone can feel that they own their share - that they can contribute ideas and update the scope of the information as required.
One excellent solution is to use PlanHQ.com - an online business plan web site, based out of Wellington, NZ (the ’silicon welly’ as they call it!). It allows you a free 30-day trial, then very tiny rates per month thereafter - but all in all, the goal is to allow you and other key members of your business to define your business plan together, and then - and this is the important bit - and then go about actually *working on your business*, with tasks and todo lists etc all on this web site, all the while *constantly comparing your actuals to your business plan*. Smart stuff.
——
The bottom line is that all the above business plan types have generally the same core content - the type of information that actively assists you in setting goals and then measuring your success (or failure) in both long term and short term areas.
The basic 10-page business plan covers the following:
Page 1) (Often the cover) Your elevator pitch.
Usually with your “10 second elevator pitch” - the best way to describe your business to someone clearly and plainly, if you only had 10 seconds to do it.
Page 2) An executive summary.
This is a one-page version of your 10-second pitch. The smart thing to do is write this page last, as then you can just highlight the key points from the following 8 pages…
Page 3) Your industry.
Which one are you in? What is the health of it in general? Where does the future of it lie? How are you placed within it? How do you *want* to be placed within it?
Page 4) Market analysis.
Who is your target market, and how will you reach them? Either dig into your own customer data, or research generic demographic information to find out who might be interested in your products or services.
Page 5) Your competitors.
Don’t tell me you haven’t got any! If you don’t have one right next door, then ‘zoom out’ until you find some. ‘Zoom out’ geographically to find local, regional and national competitors, as well as online competitors. Find out what they do better than you, and what you do do or can do better that them.
Page 6) Marketing plan.
Combine pages 3, 4 and 5 into one big cake pan, and find a recipe to plan out how you’ll target your market, considering the trends in your industry, and the competitors you have already. Make goals and measurable targets.
Page 7) Your team.
Who you’ll need/who you have to make all this happen.
Page 8 ) Assets & Liabilities.
What stock/intellectual property/resources do you have already? What debts/problems/bad stuff will you have to overcome?
Page 9) Financial plan.
Fire up Excel, and make a basic pass of what you’ll need, when you’ll need it, and what sales figures you want to achieve to make it all work. Keep this one to one page, though - make thousands of Excel sheets for your own tinkerings, but keep the ‘published’ version simple and straightforward - and label everything clearly so that even a stranger could understand it.
Page 10) Milestones
And finally, unless you just want to do this for your own benefit (’bottom-drawer’ style), or for multi-millions in venture capital, then you really need to put some people and some dates next to your goals. Better yet, make mini-goals and mark them in your diary or out sticky notes on your monitor - whatever works for you, but in the end, be accountable.
——
Go on, tackle one page a day - just spend a small bit of time navel-gazing, and you’ll be investing the best thing you can put into your business: your brain.
AB out
