Before I get to my point, I have a confession to make.
For a long time, I didn’t believe in business plans.
In fact, I still don’t. At least not in a traditional sense of the word.
I don’t believe in inhumanly long documents. You spend months on writing, but in the end no one ever reads them. For me, that’s a waste of time.
Your time could be better spent actually building a business and not writing about it.
But, I do believe that every entrepreneur should write a description of his business future. A document in which you describe what you plan to do and how you’ll do it.
In that kind of business plan, I do believe in.
Of course, there are plenty of cases when you do need a long and comprehensive document. Such cases include when you’re looking for funding or want to get a loan from a bank. But that’s a totally different story. That’s not my focus with this post.
A description of your idea on the back of a napkin is not a business plan. It’s an awesome start, but not quite enough.
I’m suggesting you write a one-page plan in which you pour the results of your initial thinking process and ideas you wrote on pieces of paper (or napkins for that matter).
A business plan is a never finished product. You should often get back to it and revise what you’ve written. Tweak a thing here and there, and include whatever you’ve learned in the meantime.
To help you get started, I’ve prepared a template for you. You can use it to help you get started building your own business.
As I’ve already suggested, the longer your plan the smaller the possibility anyone will ever read it.
The chances of anyone ever reading an insanely long business plan are slim to none. Long documents are a waste of time.
Also, the longer you spend on writing your plan, the longer your idea is not on the market. It’s as simple as that.
And the longer you’re not on the market, the longer there’s no revenue coming in. Not to mention that someone else could come up with a similar idea and launch it before you. Or, consider the possibility of major shifts altering your plans.
Paul B. Brown, a best-selling author, came up with what he thought was a terrific book idea. He planned to go to successful entrepreneurs and ask them for copies of their original business plans. He would analyze the plans and draw parallels on what every entrepreneur need to do to be successful.
But his book never came to life.
Because he found out that most of the businesses are not even close to what they planned to be. For example, some said they’ll specialize in developing hardware, but ended up building software.
When you’re writing a business plan, you’re in a way trying to predict the future. But you’ll never be able to account for everything. You can’t think of every single thing that’s connected to your idea. And you certainly can’t stop the fast spinning wheels of today’s marketplace.
Babson College, one of the most prestigious entrepreneurship colleges, performed an interesting study. It suggested that there’s no real difference in ultimate success between having and not having a formal business plan before starting your business.
So before you start with your writing, stop and ask yourself, “Is my time writing better spent actually building my business?”
But then again, even though I’m suggesting you shouldn’t exaggerate with details in your business plan, you should, nonetheless, make a plan. And every plan before you start a business is in essence still—a business plan.
The value of business planning is not in the final document, but rather in the process of making it.
You transcend your thoughts on a piece of paper. Doing that will clear out the fog in your brain. Heck, it will also help you develop your idea further, or even get a few new ones.
The process of building your business plan will force you to review your idea, assumptions, value proposition, and finances. Basically, everything.
You’ll discover connections, opportunities, and caveats you’d otherwise miss.
Brent Beshore of AdVentures made a great point when he said, “It’s great to write one simply to throw it away. The mental gymnastics are great. The plan is basically worthless the moment you’re finished—but it will force you to think about things you might not have otherwise.”
I’ve written about the importance of accountability in the past. A business plan is a wonderful tool to hold yourself accountable and control your fate. When you go along your entrepreneurial path, it becomes a reference point. You can go back anytime and track your progress.
And of course, by writing down your plan, your thoughts and ideas will be much more structured. You’ll be better prepared to present it to anyone—potential customers, partners, or coworkers.
As before mentioned Paul B. Brown puts it, you should do the least required amount of work to convince yourself your idea is worth pursuing. Then put your product on the market. If people buy, you’ve done all the research you need.
Now that we’ve covered “for and against”, let’s look at what are the crucial parts of a business plan.
Every decent plan includes at least:
You should keep it short. Don’t write more than a few sentences for each point. Be exact and use simple language. Even a 5-year old should be able to understand what you’ve written.
Again, if you’re struggling to write your plan, feel free to download my one-page template. I’ve also included short instructions to make sure you understand every point in the template.
So there you have it. You’ve learned my opinion and suggestions on business planning. What’s your opinion on the subject? What do you think?
Did you have success with business plans or do you think they are a complete waste of time? Share your thoughts in the comments!
Also, it would mean the world to me if you share this post with a friend who needs to read this!