What makes the perfect business plan.

Should it be a straightforward one-page action plan, or a hefty volume detailing every little aspect of your business? Well, there are good reasons for each of the formats, and everything in between.

For example, when I started my agency, I went all in with a super-detailed plan. I mapped out my target market, researched my competitors, detailed my services, pricing, and even financial models. I shared copies with some key people – my brother, a born salesman, my husband, who spots inconsistencies like a hawk, and my buddy Dick, a business coach with a knack for financial stuff. They each shared their perspectives and revised version was about 40 pages long. Every year, I’d  revise it based on the the notes I made through out the year, staff and technology changes and new approaches I wanted to try.

As the company matured and found its groove, I didn’t need to overhaul the whole thing annually.  In the last few years, before I sold the company, I relied on a two-page summary alongside some financial forecasts. It was easy to update and share with my growing team.

So if you’re just diving into the entrepreneurial pool or shaking things up big time with new markets or products, a thorough business plan is your ticket. Especially if you’re eyeing up a traditional bank loan or investment from a partner. However, once you are up and running  a simpler operating plan is a better use of your time.

Now, before you dive into writing, think about who you’re writing for. If it’s just for your eyes, you can breeze through the historical information  – you lived it, after all. Pour your energy into the strategy and day-to-day grind. But if you’re trying to woo investors, you’ll need to show them there’s a hungry market for what you’re bringing to the table. They want to see you’ve done your homework, scoped out the competition, and feel your customers’ pain.

Investors and bankers will be eyeballing your team. Got the right folks with the right skills to take this ride from startup chaos to smooth sailing? When it comes to the numbers, investors might cut you some slack, knowing startups are basically taking educated guesses. But bankers handing out loans? They want cold, hard evidence that you’re not just blowing smoke.

With your audience in mind, here’s  what a solid business plan should include:

  • Executive Summary: This is the trailer to your blockbuster, summing up the plan and leaving them wanting more.
    • Company overview
    • What you’re selling and who wants it
    • Your goals
    • The Financials
  • History and Where You Stand: Tell your story – Why you started, why you will make it, and what success looks like.
    • Your journey so far
    • Wins and milestones
    • Your mission, vision, and goals
    • Who’s calling the shots
  • Market Research: Don’t play guessing games – do your homework. Does anyone really want your product?  Conduct research before to back up your claims:
    • Who is your ideal client and are there enough of them
    • What are their preferences and what influences their purchases
    • Market trends
    • Assessment of the competitors
  • Business Strategy: Lay out your game plan for each of the four P’s:
    • Product: What’s your thing and why should folks care?
    • Place: Where can they buy it?
    • Price: How much will it cost? What types of purchase incentives, discounts or terms will you offer.
    • Promotion: How will you spread the word?
  • Operations: Time to get into the details.
    • Who sill actually sell your product.
    • What is your production process. Even  a service business has a production process.
    • Your employees – How will you recruit, reward, train and retain your team.
    • Backup plans for when things go sideways
  • Forecasting and Financials: How does all you activity drive to the bottom line.
    • Past and future profits
    • Cash flow – What’ coming in and what’s going out.
    • How much do you need to sell just to break even.
  • Appendix: This is where you put all the other “stuff” which is important but doesn’t seem to fit anywhere else. It can be as long or as short as you want. Almost anything can go in this section. It might include
    • Expanded product descriptions, technical specifications, and patents
    • Comprehensive financial statements
    • Certifications, licenses, and contracts
    • Newspaper clippings, testimonials, and letters

A Business Plan is Never Really Done

As you finish your business plan draft, remember, it doesn’t matter how simple or complex your business plan is. It is the process, not the finished product, that is important. A good business plan is never finished. Want to learn more about business planning?

Check out a few of my favorite conversations about business planning

 

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It can be just a simple outline of the actions, milestones and metrics you will employ to move toward your final goal.
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