Think of your business plan as an agile document and avoid treating it like a checklist. While each section is independent, it must also fit into the bigger picture and work with the other sections in your plan. As your company changes and grows, so does your business plan. Remember that it’s about your company, not a product or idea!
While a business plan may seem antiquated at first blush, it does help to go through the exercise. We can think of it as a ‘discipline of brainstorming and organizing thoughts’ about a business into a cogent document. At the beginning of a business startup, the business plan changes so much that it may get in the way of progress. However, once others start to notice your business (like partners, and investors), you’ll want to show that you’ve thought through your business comprehensively.
“The more research you do in the target market may help you better address your operational processes for a more customer centric approach.”
Conservative vs Aggressive
It is important to present the pros and cons of your business. You want to establish that you have researched and understand the risks everyone involved will be taking. While your business plan is an objective and fact-based document, you will want to present the conservative version with plenty of credible sources cited to support your opinion.
“Business plans should not be written in the first person. Remove the use of ‘I’, ‘We’, ‘Our’, and ‘Us’. Use your company name instead.”
Organizing the Process
Divide sections of your business plan and give to team members or employees. Some sections may take weeks to complete. Other sections may be quick and easy to complete with little additional support needed. The market analysis tends to take entrepreneurs the longest to complete, as it can be tedious. We often find completing the pro forma financial statements near the final stages is the best approach, but even once finished it is important to constantly refine and to develop your economic model in the process.
Three Parts to Focus On
1. Industry, Company/Concept/Products, Market, Economics — Lay the foundation for opportunity and how to capitalize on it.
2. Marketing, Design and Development, Operations, Management Team — Drill down on the specifics of how to make your business operational.
3. Risks and Assumptions, Timetable, Financials, Offering/Deal — Focus on how the team will implement the concept, the possible pitfalls, expected projections, and what you need from an investor.
Remember, the business plan is ultimately for you and your team, not for the banker or competition. It is a valuable part of your business portfolio and allows all future business decisions to follow the same bigger picture. You may be amazed how often you end up referring back to your business plan.
For more information on raising capital for your business, visit Chompff Consulting. We help entrepreneurs from start to finish get their idea off the ground.