Building a business plan can be time-consuming and tedious. It can also bring upon questions that pile up exponentially which leads to discouragement, self-doubt, second thought, and ultimately giving up. As a result, building a business plan is as far as most people ever get to start their own business. However, a business plan really isn’t that different from…say…a schedule you plan out in your head everyday as to what you’ll do throughout the day.
All businesses need a plan or blueprint. If you don’t have a plan, the business is bound to be chaotic and lack focus. I mean think about it. You’ve been taught to write an outline before writing an essay; you’ve been taught to do your research before doing a project; you’ve been taught to study before taking a test; and you’ve been taught to think before you speak. The list goes on and on. The bottom line is that we all must prepare before we act. Starting a business is no different.
As you plan out your business, you’ll discover new ideas and concepts, you’ll create new goals and visions, and you’ll review and analyze your business idea. You’ll be continuously refining your original Idea/Concept.
However, while a business plan is often needed when you are getting financing for your business, I find that most business owners don’t find them very useful. Why not? Because usually they are written from a very long term frame (typically five years) and once they are written, they are put on a shelf and never looked at again. I’m going to suggest some ways that you can get more out of your business plan.
The question to ask first isn’t “HOW” to write a business plan but “WHO” is this business plan for? If you’re a solo-entrepreneur, then a business plan is merely for you and you only; primarily outlining the goals and blue prints of your business and answering the 6 key words: Who? What? Where? Why? When? How? If you’re a small business, then the business plan is for your investors and yourself; primiarily outling future projections, company goals, customer base, markets, competition, management, financial status, investments, and etc… Once you identified the “WHO”, the “HOW” comes naturally because now you can frame your business around the people that you’re proposing the plan to.
As I’ve mentioned, a business plan for a solo-entrepreneur only needs to answer to him/herself…and perhaps a partner or two that wants in on the business. The business plan must address the 6 KEY words of:
1.) Who? – Who is our customer?
2.) What? – What product/service will I provide to the customer?
3.) Where? – Where can I find the market for our product/service?
4.) Why? – Why will the product/service I chose work?
5.) When? – When can I launch the product/service to the customer?
6.) How? – How am I going to deliver the product/service to the customer?
For a solo-entrepreneur, these questions must be answered in your business plan. The business plan you’re trying to build then should frame around these questions and provide details for each specific question. Once you tackled the 6 questions, you’ve laid the ground for your business and you can start preparing for the launch.
For small businesses, the business plan is a little bit different. The 6 questions still apply, but in a slight altered way. Business plans for small business should be filled with projections of what a venture might be able to achieve in the future. They should also be filled with facts about the venture’s past and about the market in which it operates. It is these facts that often convince an investor that the opportunity is right for them. Key areas in which facts must be presented include:
1.) The Company
2.) Customer
3.) Market
4.) Competition
5.) Management Team
6.) Financial Projections