Creating a business plan is one of the standard “must haves” for entrepreneurs. The single hardest thing about writing a business plan is making it useful to your business.
The reason is that the business plan is not for introducing your idea to an investor, but rather a component of due diligence once you have gained investor interest and trust.
Early in the relationship, investors are more interested in getting to know you, understanding your problem/solution, evaluating your customer knowledge and assessing your business model.
A 20-30 page
is a waste
Entrepreneurs typically write a plan to impress investors and sell the reader on their great idea. These plans are useless and end up gathering dust on your shelf and dropped in the trash by investors. If you have one of these plans already, throw it away and start fresh.
You can “gussy it up” for investors later. For now, build a plan that helps you build your business.
9 Guidelines for Writing a Useful Business Plan
- Write for the Business. Develop a plan that is a foundational reference document for your business. What is the problem you solve? What data do you have that customers will buy your solution? What does your business need to operate and prosper? A good place to start is using the Business Model Canvas to outline what a plan needs to cover. Address infrastructure, customers, distribution, marketing, and finances in such a way that the plan describes how the business operates.
- Create Your Customers. Develop 1-2 customer avatars that will be enthusiastic buyers based on your extensive research. Describe how they live, what they do and why they do it. How are you solving their problems? Why will they buy and become repeat buyers? How will you reach them? How will your product change their lives? Focus all of your efforts through the lens of your customer.
- Keep it Surprisingly Short. Make the plan concise. If you write a plan that is 20 pages or more, it is probably too long to understand easily and be useful to your business.
- Review and Revise Frequently. Schedule time to re-read and adjust the plan every 30-45 days. Markets, customers, and competition can change overnight; an outdated plan is useless.
- Highlight Your Values. Be clear about what is important to you. Is customer service a top priority? Is honesty and integrity expected? Be positive and clear. Infuse your values throughout your plan.
- Seek Team Input. Share the draft plan with your team. Incorporate their input and ask them if you got it right. Have your team schedule time to Review and Revise. Seeking input is a great opportunity to leverage your team’s expertise.
- Focus on Principles. Keep your plan focused on the whys and hows of the business. Why was it started? Why are you selling particular products or services? How do competitors compete and react to events in the marketplace? How will you compete? What events can you predict and how will you take advantage of them? Answer these questions through the lens of “this is who and what we are, and this is why and how we will do business”.
- Emphasize Processes. You need systems and processes to grow and sustain your business. Document everything from managing vendor relationships to making sales calls. These processes are one of the key reasons the plan should be reviewed every 30-45 days. Add processes as they are developed. Your team will be indispensable here.
- Clarify Roles. Identify the roles you need currently and what roles will you need in 3, 6, 9 and 12 months. Document which team members have responsibility and authority for which processes and decisions. Leave room for role changes and additions and expect your team to identify these as you regularly review the plan.
Your business plan can play a key role early in company formation and powering growth. It enables you to think clearly about who you are, who your customer is, why your company should exist, and who you need on your team to be successful.
Put the effort into creating a working business plan that forms a foundation for your business. You’ll be a few steps ahead of entrepreneurs that write a plan to market their business to investors.
What lessons have you learned writing a plan for your business?
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