There’s some debate about whether business plans should go the way of the dodo, or whether they’re essential to business success.
But when you face the facts, it’s obvious that business plans aren’t dead. Banks need them before granting a loan, and potential partners or investors often want them as backup for a pitch deck. Even certain crowdfunding models, like equity crowdfunding, require a business plan.
If you’ve heard that business plans are dead, you’ve probably procrastinated about writing one. It may seem like a waste of time when you’d rather be growing your business. Yet to certain people – the exact people who stand between you and the money you need to launch – a plan shows that you’ve thought through your strategy and you’re consciously and deliberately building a company.
If you’re still sitting on a badly written or incomplete business plan, try these five steps to get the cogs turning again.
5 Critical Steps to Writing a Great Business Plan
1. Shift Your Mindset
You have to get rid of the part of you that resists the task of writing the plan. It’s important to realize that if you need money to build your company, and you’re planning on getting it from external sources, you need a business plan. So there’s nothing more productive than writing it right now.
2. Define Your One Perfect Customer
You might know who your best customers are, but your funders don’t. Pinpointing your ideal customer gives powerful focus to your plan. What type of buyer would never get sick of your business, even if they came to you every day?
A clear understanding of your ideal customers helps you grow a business that serves more people like them. Stop trying to throw spaghetti at the wall and hoping there’s someone out there who will eat it. Start with a small niche of your best potential customers, and then expand your business – and your plan – from there.
3. Know the Market and Your Industry
Do your research and source it! Market research is useless if your claims aren’t backed up. Get on Statistics Canada’s website and look for the attributes of your ideal customer. Find relevant industry associations and read their reports to get a sense of what’s going on in your space and who your competitors are. Write honestly about what you find and include your sources as footnotes.
4. List your Resources
You need people to build your business so figure out who they are and what they’ll do. You also need to consider what physical or virtual tools you’ll require, as well as any equipment. These are your resources – people and things that help you create the perfect experience for your perfect customer. This exercise helps you plan out the staffing and operations sections of the plan.
5. Get Real About Money
Start with costs, not revenue forecasts. List every expense you can think of and the average monthly amounts for each. Some will be variable, so you can always set an annual budget for things like marketing and just divide by 12.
Get used to using math and learn the basics of finance. You need those skills to be financially responsible in your business.
Business Plans Are Worth It
Whatever template, guidebook or seminar you use to help you create your business plan, be prepared to modify it to suit your business. Because every business is planned and operated differently, no template can accommodate them all. Don’t let that slow you down.
Expect obstacles when you’re writing your business plan. Expect it to be challenging. Through this process you’ll learn a lot about your company and your industry and there’s huge value there. Remember that it’s your duty to do this work, because you are asking for other people’s money. It’ll be worth the time!
Learn More
Are you taking advantage of Small Business BC’s wide selection of seminars for entrepreneurs and small to medium-sized business owners? Space is limited, so don’t miss your chance to register today.
And if you want specific questions answered for your business, make an appointment to meet with a Small Business BC Business Advisor or Business Plan Advisor now.
