Without doubt there has been a few times during your entrepreneurial adventure someone has told you the importance of a business plan. Even if you did jot one down, it doesn’t mean it hasn’t collected it’s fair share of dust over the years. I get it, the idea for your business may have evolved over weeks and will continue to over the years, and that’s okay! Having a business plan doesn’t mean it’s sealed in stone.
“This living, breathing document generally projects 3-5 years ahead and outlines the route a company intends to take to reach, maintain and grow revenues.” – SBA.gov
If you don’t have a business plan, cringe at the thought of having to write one, or are thinking of revising yours to give it some needed love then read on for some tips to help with the process or writing one.
Write for all the right reasons
Your word choice, organization and time put into this document are going to be drastically different depending on it’s purpose. Many entrepreneurs write a business plan in anticipation of handing it over to a bank for a loan. Others approach business plans more casually as a document to be an clean idea catcher, taking their big vision and putting it down in ink.
You’re writing a plan not a dissertation, start small
Start by just answering these key questions:
What? These are going to objectives that are clear and can be communicated to your team.
How? Now that you have stated what you want to do, how are you going to do it? What are your strategies?
When, Where & Who? These can be grouped together as they take on the mechanical details of how strategies are going to be implemented. These can be specifics or high level tactics.
Already have capital?
Even if you have all the money in the world, you still need a business plan. Instead of calling it a business plan, let’s rename it to being call a FOCUS document. This document will give you permission in energetic brainstorming missions to table the outpouring of ideas and re-focus on the objectives and strategies that were agreed upon. Worst case? You tweak your focus document when you need to.
You sign the bottom line
While the creation of your business plan can indeed be a group effort, the actual process of putting pen to paper and creating the final document needs to be done by [drumroll please...] YOU, the business owner. This isn’t going to be a long winded document to be filed away, it is going to become something you have memorized, gone over and are committed to. Once again, this business plan is your focus document. So take your team, advisers and best friend’s-mother’s-neighbor’s advice with a grain of salt, don’t make the mistake of copy and pasting their ideas verbatim, it won’t turn out pretty.
It’s OKAY, you are probably doing it wrong
When most people approach a business plan they stuff it with a bunch of junk. This is not the place for buzzwords, acronyms, or the place to ramble on for 60 pages. Here is a skeleton structure to consider when creating your business plan.
“Think of it as a calling card to get you in the door, to get me asking questions. Do NOT write a 50-page business plan with five-year financial models. It’s garbage in and garbage out.”- Shanda Bahles, general partner at El Dorado Ventures, USA Today
One fantastic page. This is your chance to demand attention to get people to read on. This one page gets 75% of your efforts.
Highlights: Projections & Timeline
One page with the key metrics (costs, customers, marketing budget, sales figures). This might seem daunting, yet try to stay away from pie in the sky numbers, since everyone knows these are estimates.
From my research the average business plan is around 20 pages. Some are able to be concise and get it down to as little as 5, but for those who are pushing the 30 page mark might be time to scan and see if you REALLY need those ten extra pages. Think, the longer the plan the more you are putting readers to sleep. In writing a business plan, less is truly more. The tighter the thinking, the shorter the plan which means it will be devoured faster by your management team, bank loan processors and you will be able to memorize it easier.
“Because entrepreneurs who don’t get clear about what they want from life run the risk of starting a business that might not be a good business for them.” – Melinda Emerson, Small Business Trends
Remember this is a plan is going to be written to be deliberate, however as you find new better ways of executing your plan or find your numbers were graciously under the scope of reality allow yourself to have a flexible plan.
“A business plan is a tool that can bring clarity to decision making in your business. This is not a static document – a functional business plan is a dynamic plan that is consistently reviewed and updated. It keeps the business on track so that you can achieve the vision for your ideal life.” – Racheal Cook, The Yogipreneur
Here are a couple other links you should dive into.
Frugal Small Business Start-up Tips: Step 5- Writing a Business Plan
Caroline Baxter: Creating A Start Up Business Plan