When and How to Write Your Plan
You’ve probably heard more than one person claim that business plans are dead. Forbes writer Dileep Rao wrote that “no one gives you money just because you have put words on paper”.
Sure, 100-page business plans chock full of industry garbage and hockey stick growth charts are dead. All you need to know is who your customers are, who your competitors are, what problem your business solves and for whom, how much revenue and profit you think you’ll earn, who you need to hire, and how you plan to market and grow the business.
What’s the perfect vessel for all of that information? Somewhere you can easily go to check whether you’re on track to reach your business goals?
Oh right – a business plan.
Types of Plans
You can write a plan that’s just for you, a plan for the bank to analyze, a plan for investors to discuss, or a plan that covers only the basics of your big vision. You can plan a week, a year, or five years in advance. You can use all sorts of planning tools. So how do you choose the best way to present your plan?
Well, it’s all about who’s going to be reading it. Here’s a quick guide to knowing what type of plan to create, how detailed it needs to be, and how far ahead you need to plan.
|Who’s Reading It?||What Kind of Plan?||What Should It Include?|
|Just you (and maybe your mom)||
||At a minimum, write down your business and personal goals, your ideal customer, and the problem you solve for them.
I also strongly recommend creating a simple monthly budget so you know, at a minimum, what it’s going to cost to run your business.
You can include anything else you want, in any format you want.
||Like it or not, you have to put together a conventional plan if you’re borrowing from a bank. The main elements include:
||Usually presented visually, a great pitch deck must include (at a minimum):
|Family & Friends||
||The type of plan you create really depends on what your family and friends want to see. Some of them will want to review all the elements of a traditional plan, while others will be happy with a 2-3 page summary – after all, they’re investing in YOU.|
But wait just a minute – how do you know it’s time to write the plan? Read on…I have the answer to that, too.
When to Write a Plan
You might think a business plan is the first step on your entrepreneurial path, but you’d be wrong. Make sure you’ve taken care of these things first:
Find the right mindset. Stop procrastinating and decide to commit to this thing.
Clarify your idea (and the problem it solves). You probably want to start a business because you see a problem and you think you know how to solve it. Can you state that problem – and your proposed solution – in a couple of sentences?
Define your ideal customer. See chapter 2.
Gather resources. Do a little research on your ideal customer, but also consider who in your life can support you – family and friends, professional acquaintances, local small business offices, maybe even your boss?
Step 5 is Write the Plan. Because if you don’t have a clear idea of what you want to solve and who you want to solve it for, there’s no point in planning. Business plans are somewhat fictitious by their very nature, since they try to predict the future – so the clearer you are about your concept, the more likely your plan will actually suit your needs and become a useful guide to your company’s launch and growth.
Enough with the practical stuff – let’s talk about how much fun this is going to be.