When you hear the words “Business Plan”, which one of the reactions below describes you best?
- I don’t need it, it’s all in my head
- I don’t have the time to prepare it
- I don’t know how to write a business plan
- I already have one, but not sure if I did it right
If you answer any one of the above, this post is for you.
What are business plans anyway?
A business plan is just that – a plan. It is about determining your business future. It answers the questions:
- What direction do you want your business to go?
- Where should it be next year or three years from now?
- What steps do you need to do to get there?
Having a business plan gives you clarity on where you are, what you need to do to get your business to succeed, and how to make your business grow.
The Many Styles of Business Plans
There are a lot of information on the Internet about business plans. Some include templates that you can just plug in the answers to numerous questions in specified places and hit print. Boom, you have your business plan. Most of these templates are for what I call “formal” business plans. Those required by banks and investors before authorizing a business loan, and they do take a bit of time to assemble, especially if you have not done the research necessary to put your business plan together. Is this the best way to write your business plan? Not really.
Business plans are not “one size fits all.” The plan should be specific to your business, at what state your business is in – start up, growth or expansion, and who is the intended audience. If it is for internal use only, you do not need an elaborate 40-page business plan.
In other words, you only write the part of the business plan that you need at the moment, and you leave the rest out. This will make the preparation quicker and relevant to your present situation.
Business Plan the Kaizen Way
The illustration on the left shows the process following the first three steps of Kaizen for Personal Life, which you can also use for your business.
These steps of Kaizen living are: (Do Small Steps) make changes through small improvements that are easier to stick with, (Review) eliminate waste and monitor results and (Adjust) correct the course, as appropriate. Once you identify successful actions, standardize best practice and reward accomplishments (fourth and fifth Kaizen steps).
Some people call this process the lean method popularized by Eric Ries in his book, The Lean Start-up, or the PDCA (plan-do-check-adjust) method of Dr. Edwards Deming. Whatever it is labeled, this action plan works if you follow it wholeheartedly.
This is the first series of my business plan posts. Below are the common elements of a formal business plan and a short description of what they contain. In the second series, you will learn which of these sections do you need for internal use of a bootstrapped (does not need outside financing) start-up.
- Executive Summary – this section gives a summary of key points of your plan. It is usually the last element to write.
- Company Description – describes your company, business model, who you are, where you operate
- Product and Services – describe the products and/or services you offer, how they are provided and by whom, and plans for future service offerings.
- Market Analysis – describe the different groups of target customers included in your market analysis and explain why you are selecting these as targets.
- Marketing Plan – summarizes your organizational strategy for target marketing, sales and marketing activities, and product/service development. Build a focused, consistent sales and marketing strategy.
- Management Strategy – describes the management and personnel structure of the company, including any gaps that need to be filled.
- Financial Plan – summarizes the financial aspects of your business plan
- Appendix – graphs and tables to fully describe the data summarized in the financial plan.
Stay tuned for Business Plan Series 2 – Writing Business Plan For Internal Use of Boot Strapped Start-Ups.