What is a Business Plan Anyway?
As defined by Wikipedia, a business plan is a "formal statement of a set of business goals, the reasons why they are recognized achievable, and the plan for reaching those goals. those goals ". This is great, but does not tell us much about what it really is and how you end up with a plan.
Cheryl describes it as a process, which really resonated with me. She said, "The process is a series of taking your thoughts and visions and applying it to paper to basically give you a quick check to say, 'Is this really a great idea to keep moving forward with? Is this something I should do? If I can do it, how can I make it work? "
Given that it is a "fast check", it does not need to be so formal to start. Cheryl indicated that she has created many a plan for her clients based off scribbles or business journals. She recommends, when you're just starting to think about forming a business you may want to dedicate a notebook or journal to jot down all the thoughts you have about your business. this sparked my memory, as I recalculated that some of the greatest companies out there have started by a doodle on the back of a napkin. Companies such as Genentech, who's founders spent some time doodling on their napkins over drinks and hoagies which they later turned into a formal business plan and a flourishing biotech business.
Why Do You Need a Business Plan?
Aside from it being a litmus test to see if your business venture is even feasible, a business plan is a roadmap to help you get from where you are to where you want to be. And, as Cheryl indicated, unless you've never planned one thing in your life (ie, a party, vacation, etc.) you need a business plan. Also, as you flesh out your plan, it will help you determine, "how great an idea is and how bad it is in certain places and what you need to do to fix it" Cheryl says.
A business plan will also help you from a financial aspect. From the initial financing stages to determining when you will break even and bring in profit, the business plan can provide you with a timeline a well as a way to course correct when needed. Cheryl also notes, depending on who needs to see your plan, the detail may vary, but the basic structure will remain the same.
What is the General Structure of the Business Plan?
There is no right or wrong, rather structure is typically dictated by whomever needs it. If you are self-funding, then you want to make sure you have the market analysis, a break-even analysis, etc. If you are getting funding, then the bank, VC or family member may require other information. That said, here is a rough outline of the recommended components of a business plan, detailed further in the tools section under "Business Plan Outline" on Inc.com.
- Executive Summary
- Vision
- Market Analysis
- Competitive Analysis
- Strategy
- Products / Services
- Marketing and Sales
- Operations
- Financials
How Should I Should Revise My Plan?
A business plan should be reviewed and updated at specified intervals. Whether it is quarterly or twice a year, this kind of review will help you determine if you are still on course and will help you identify early warnings if you are not. Remember, there is a reason why large organizations have strategic business reviews and quarterly assessments, it helps to ensure the plan is being executed and allows for quick changes based on external and internal impacts.
Also, by reviewing your business plan in regular intervals, it ensures that you are keeping focused and strategic with your time and money.
In Summary – Business Plans:
- Will help you to ensure you have a sound business idea and appropriate back-up plans to make it all happen.
- Provide a roadmap to help you get from point A to point B.
- Help you course correct, especially when you encounter unexpected roadblocks or detours.
- Start with a doodle or a journal.
- Vary in length and depth depending on your needs.
And, if you're still not excited to create your own business plan, hire someone like Cheryl Isaac who can guide you through the process of creating one, or will create one for you. For more information on her services, please see the resource box below.
If you are serious about starting your own business or wonder how to get your business fully up and running, take time to create or update your business plan today.
Meet Our Expert:
Cheryl Isaac is a former banker-turned-entrepreneur who now focuses her efforts on helping people plan for business. With almost a decade of experience as a banker, she once read tons of business plans and was taught the "secrets" of proper business structure from one of the most popular sources of funding. Now, her days are revealed revealing those tips to start-up and small business owners. She is the owner of Isaac Business Services; A Business Start-up Company that writes, lectures, and advises about business planning. She is also the Founder of the online business planning center; The 12MonthBizPlan.com and the business plan workshop tour; The 48 Hour Business Plan Challenge. Cheryl combines her love of writing with her passion for business in her soon-to-be released book, "A Different Business – 7 Easy Steps to Starting & Planning a Business Around Your Purpose".
You can find more of her work at her newly launched entrepreneurial business club at www.adifferentbusiness.com .
