Business Plans Made Simple
A lot of entrepreneurs hear the term business plan and get nervous. They think that it’s going to take weeks to prepare and require the destruction of a few trees.
Let’s be clear right from the start. If you’re setting up a business and you don’t need any outside funding, then you don’t have to have a business plan. But, that’s not to say you shouldn’t have one. Documenting your thoughts, identifying the market and doing your sums will stand your business in good stead for long term survival and will keep you on track to achieve your goals.
What’s a business plan?
Business plans are really a statement of what you’re going to do in your business and how you’re going to get it done. But really what goes into a business plan depends very much on what you’re trying to achieve as a business.
For example, if you’re looking to raise funding then the content will be completely different to a business plan used purely for internal consumption.
Which brings us neatly to the top 10 things you need to think about when writing a business plan:
Know your audience
The starting point for any business plan should be the perspective of the audience. Is it to secure funding, or to communicate the future plans for the company? You should tailor your plan to the audience’s specific requirements. Potential investors will be looking for a clear understanding of the proposed return on investment and the time taken to get their investment back.
Who are your customers?
You will need to ensure your plan identifies who your customers will be including the size fo the market and the expected growth over the life of the business plan.
The Competition
Not only is it important that you know who your competition are, you’ll need to think about how you’re going to deal with their challenges.
The ‘Mini Skirt’
Whilst your plan should be short enough to arouse interest, it needs to be long enough to cover the essentials. The plan should reflect a sense of professionalism, with no spelling mistakes, realistic assumptions, credible projections and accurate content.
How does it look?
Think about the format of your plan – is it going to be a written document or a PowerPoint presentation?
Show me the money
If you’re looking for investment for your business you need to talk about what the investment is that you’re offering. For example 20% of the business and then lay out for the investor why they should invest with you. You should cover how much money you’ll need, what it’s going to be spent on and how you’re going to make money.
“It ain’t over when the Fat Lady sings”
The plan does not finish when you’ve secured your funding or launched your business. You should regularly follow up the plan to see where you are against your milestones and address as necessary.
So, what tell us about your experiences in writing a business plan. Did it help you get your business off the ground?
I was thinking about business plans this morning. Specifically, that business plans are rarely followed once the business gets going. (or so everyone says).
But my thought was that’s not the real point, whether the plan is followed. The important part is the exercise of thinking everything through.
Dave Doolin´s last [type] ..Broken Link Checker plugin for WordPress review
Absolutely Dave. That’s exactly right.
The only people who will care if your plan isn’t followed is investors. If you haven’t got investors, whether you follow the plan or not is up to you. But as you say, thinking about what you need to do and how you will make money from your business is a worthwhile exercise in its self.
Thanks for the comment!
Matthew Needham´s last [type] ..How to get big results- 80-20
Hi Matthew:
This is Fran Aslam from the blog hoppers. I do blog hop a lot, for giving comments and getting comments.
This is my second time commenting on your blog but I did not see my comment here. I have a feeling it got caught in the spam folder.
I will give it a few trials. Your post about business plan is outstanding. As you have tried to take audience by the hand and explained every thing they all need for planning to start a small business. You have talked about what goes on in a business, to money for expense, knowing prospects, your competitors, and I love these words where you are saying “short enough to arouse interest and long enough to cover all essentials” You are a great writer and You try to keep it light by using your sense of humor as needed.
Make yourself a good week end.
Fran Aslam
Fran Aslam´s last [type] ..Online Affiliate Marketing – 5 Tips To Increase Total Revenues
Matthew Needham Reply:
October 23rd, 2010 at 11:45 pm
Hi Fran. Thanks for stopping by. Appreciate the time taken to comment. Hope to see you soon. Matthew
A small-business counselor I know recently told me that most people starting businesses have a strong resistance to writing a business plan and usually only do it if they are forced to do so to get a loan.
Most small businesses that use their own capital probably don’t create a business plan at all. Wing and prayer…
John Soares´s last [type] ..Where Good Ideas Come From
Matthew Needham Reply:
October 23rd, 2010 at 11:44 pm
Hi John, I think that’s exactly right. I think it’s because the business owners don’t want to be held accountable, even to themselves. When, in reality, it would help them a lot.
Thanks for the comment John.
Great advice here Matthew.
I remember seeing lots of different business plan templates over the years that were ridiculously difficult. I bet ones like that would really put a lot of startups off.
Love your simple approach here
Ben´s last [type] ..6 warning signs that you’re gonna burn out
Matthew Needham Reply:
October 23rd, 2010 at 11:40 pm
I always remember that when in doubt KISS it. Keep it Simple Stupid…. A Simple approach to business has got to be the way forward. Thanks for the comment Ben.
I like the brevity of plans. It is great to get into detail for aspect of it, but there needs to be an overall plan that is short and simple.
I heard the perfect explanation once. You should be able to describe your whole business plan and idea easily withing 2 minutes.
…BUT, given the chance, you should also have the depth of knowledge to talk about it for hours.
Steve´s last [type] ..Learn from Your Mistakes
Matthew Needham Reply:
October 23rd, 2010 at 11:28 pm
Hi Steve, thanks for the comment. I like that description.
Personally, i like simplicity. The more difficult to explain your business, the more difficult it is to make money from it. I’ve heard it said that a business should be able to be described in just 10 words, which I think is a good yard stick to live by.
Matthew
Matthew,
Really really well timed post mate.
Actually in the process of (attempting to) write a business plan based on an idea I have. I need $5000 capital to start up, and so for the first time in my life I am actually having to seriously look at everything (the realistic side – interesting when you never had to do that) and write it down in such a way that the bacnk says yes.
Would love your insight actually mate
Alex´s last [type] ..By- wp-popularcom » Blog Archive » Keyword Winner SEO Plug-in
Matthew Needham Reply:
October 25th, 2010 at 9:48 pm
Alex, glad to help…! In the current economy it’s as difficult to borrow $50k as $5k. Do you have to use the banks for this? If you need any help my friend with a review of the plan, be sure to send it my way. Matthew
Not only should you have a business plan but you should have a daily, weekly and monthly plan. A lot of time we get distracted by all the hoopla on the internet. You need to stay focused, pick a company and stick with it.
Ed Cabrera´s last [type] ..Hello Blogging and Internet World!
Matthew Needham Reply:
October 27th, 2010 at 9:59 pm
Hi Ed, thanks for stopping by and taking the time to comment. A business plan is effectively a project plan and should guide you on your path to success. As you say there’s a lot of distractions and following a plan will help you avoid those distractions! Best wishes, Matthew
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