Some people think that a business plan is “old school” and that today you should just dive right in and do it, rather than getting bogged down in weeks or months of analysis and writing. The decision is up to you, but we recommend that you consider a business plan. Developing such a plan may prove necessary if you need investors, and it can save you a lot of time and money if it reveals solid reasons not to pursue your idea.
Think of the plan as a go-to market blueprint for your small business. By spending the time upfront–before you launch–to think through the strategy, competitive factors, marketing, operational needs and costs, as well as the projected P & L, you will be in a better position to execute once funded. A business plan can also help you avoid cash-flow shortages.
Many investors, including banks, will require a business plan as part of the process. For you, the plan offers some protection from launching a bad business idea before you get too far down the road, and it also sharpens your knowledge of the business overall.
A business plan does not need to be long, it just needs to be well analyzed and presented. In many ways, a shorter plan is better because it may reflect very clear thinking. If you are meeting with investors, you will want to create a PowerPoint presentation of the key elements.
There is no one way to write a plan, but key sections often include:
*Executive Summary (write this last as it pulls the key info from each section)
*Business Idea (Google example: make it easy to get answers to anything)
*Description of Business (what problem are you solving and how)
*Demo (if applicable and if you have one)
*Target Market (category, demographics, behavioral characteristics, etc.)
*Competition (companies, strengths and weaknesses, voids)
*Road to customers/Business model/Primary revenue sources
*Stages of Development (factors that will lower risk)
*Management Team (why they are qualified to make the business successful)
*Financial Projections (3 years, full P & L including cash flow, ideally monthly)
*How will the money be used/Next steps
There are a lot of products available to help you. We are not big fans of business plan software because no two businesses are alike. Plus, using some of these software packages can be more frustrating than helpful. The one product that we DO recommend is LivePlan. The cost is minimal ($19.99/month) and your finalized business plan can be downloaded prior to cancelling your subscription.
We recommend writing your answers to the above section questions. When you get to financial projections, try using the government’s templates. Once you click on the site, we suggest the template “Cash Flow Statements (3 years)”, but feel free to use any of the templates suggested. If you need help visualizing what goes into each of the sections, you can find a number of winning business plans created by MBA students here.
When organizing information and writing your business plan, keep in mind that developing an elevator pitch will be another key aspect of presenting your business to possible investors and/or clients. Click here for an interactive Elevator Pitch Builder, from the Harvard Business School. Once you have entered the site and have opted to begin crafting your pitch, note the options at the bottom of the hint panel– by clicking on the “X” you are then able to begin entering your text. This is a more interactive opportunity to design a pitch than it first appears to be, so we suggest taking a minute to look through the 5 steps.
For more great job-search resources check out Careerfuel’s “Find Work” page. If you are thinking about taking the plunge, check out our “Start a Business” page, and in either case we recommend that you “Get Inspired!”