There’s not a doubt in anyone’s mind that you need a sound business plan for a successful business. But, you shouldn’t go through the process of building and writing a business plan just because it’s another thing to check off the list. There are plenty (and I mean plenty!) of templates available on the web (and probably some on the ad links on this page), but before you get started you should think about the purpose of your business plan. Who are you writing for? What do you expect it to do for you? The context in which you write the business plan will dictate what it looks like, how much time you spend on it, and how useful it is.
Core to any business plan:
- Executive summary
- Mission statement
- Market and position: What is the market you are going after and what is your unique selling proposition (competitive advantage)?
- Business model: How exactly do you plan on making money?
- Marketing: How will you reach your customers?
- Financial projections: Revenue and expense per customer? When is breakeven?
If you’re writing it for investors (existing or potential), you’ll be taking a more management perspective. It will include more information about the management team (who are they and why they are qualified to execute on this plan), and the company valuation and investment needs. The business plan will also have to be more polished and well-written. This form of the business plan needs to sell your audience on you (the management team) and your value proposition.
If you’re writing it for yourself for validation and planning purposes, you’ll be taking a more tactical perspective. There will need to be more focus on the details and thought about how you are going to execute. The business plan itself might be in the form of bulleted items instead of beautifully flowing text, but that doesn’t mean you shouldn’t spend any less time doing the deep thought. This form of the business plan is to validate with yourself that this is a viable business worth your time and also helps you plan the activities to reach your goals. I would say this form is a stepping stone to the investor version. If you can’t prove it to yourself, you won’t prove it to anyone else (even with slick writing).
Whichever plan you’re writing, make sure your intentions are true and you are critically analyzing the business. If you’re just going through the motions of filling in the blanks, you won’t do nearly as thorough a job as you should be doing and you’ll be shooting yourself in the foot…and, unless it’s the left foot, that’s not the way to start off.
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on Mar 14th, 2008 at 8:37 pm
[...] a lot to do with its purpose and the reasons behind writing it, so the first step is to figure out why you’re writing one. If you’re like me, it may help to think of writing your business plan as another design [...]
on Aug 31st, 2008 at 6:04 am
Interesting post, what was your inspiration for this?