Business Planning

Illustrations by Helena Habdija
 

The Business Planning Process versus the Business Plan 

Many entrepreneurs I have interviewed or who were interviewed for my course state that while they go through the process of business planning, it does not always result in a written business plan document. Through this blog series we will examine the steps in the business planning process and provide easy to use worksheets that can get you to finally put down on paper what you already have in your mind.

Why Write a Business Plan? 

The act of writing a business plan lets you formalize ideas and reflects on your commitment to your vision. The document itself can then be shared with employees, investors, partners, and advisors who can then contribute and bring resources necessary like time, talent, ideas and money toward making your dreams a reality. While it may be written on paper, it is not written in stone so it becomes a living document that can be updated. Any change in circumstances like new opportunities, unexpected events and/or research that either confirms or denies your earlier assumptions requires the plan to be adjusted.

Contents of a Business Plan Explained 
 

There are many formats you can choose for organizing your business plan. It can start out on napkins or post-it notes or it can be packaged in a glossy full color presentation. No matter what, it should reflect the style of the entrepreneur and the entrepreneurial team. The content should cover all the basic areas and answer basic questions of who, what, why, when and how? The basic areas include an Introduction, Idea and Opportunity, Marketing, Operations, Finance and Results. Introduction explains the background of the entrepreneur and/or entrepreneurial team and how their skills and experiences are a fit to the business idea to be proposed. The idea and opportunity section explain what problem the idea is solving and why now is the right timing for this undertaking. The marketing component should identify specifics about the customer and the competition. It is essential to be able to know clearly who the customer is and how your idea will provide a necessary and wanted solution better than the competition’s alternatives. A big mistake is stating that everyone is a potential customer and no one is competition. Operations describe how and where you will make your idea into some product, service or experience that is offered for sale. Finance must describe how much you plan to spend on reaching the customer, beating the competition, creating and delivering the product/service or experience and of course, how much you expect to make from each purchase and over time. Results should cover what results you have achieved toward your business idea to date, what you want readers of the business plan to do in order for the business to achieve short and long term goals.
 

Business Plans are more like a compass than a treasure map 

First thing to do is start writing. Many entrepreneurs simply delay making a business plan because plans change and they do not want to set goals that they will not accomplish or have to change. However, rather than being a treasure map a business plan is more like a compass. A compass is held by a person, in this case the entrepreneur, and can help be a frame of reference when trying to find your way.\

 

What’s Next 

This is the first in a series of posts on business planning. Future topics will include Me&We Startups, Ideas vs. Opportunities, Think About Your First Customer, What Business Am I In?, Sharks and Angels: What Kind of Investors Do I Need and Want?, worksheets and more topics based on member comments, questions and requests.