I’ve been working a lot on the plan-as-you-go business plan book lately. I just turned in a final draft. That doesn’t do a lot for my blogging, but some of what goes into that book is directly related to getting your startup up and running.
One of the core concepts is that you start simple with your business plan and then grow it as needed.
Reminder: it’s not a document, it’s a plan. We are not talking about preparing a text here. We’re talking about the plan as knowing what’s going to happen.
So what are the fundamental key points? Here’s an idea so you can get started.
- The heart of the plan. It might be just thoughts, spoken, written in bullet points or pictures tagging concepts. Most successful businesses start with their identity, what they do for whom and focus on key points. That’s a great beginning and, hey, maybe that’s all you need to get started.
- What’s going to happen? What happens next? One of my favorite next steps is the review schedule, then the list of assumptions and then a milestones table showing, literally and in detail, what’s going to happen. It has dates, deadlines, responsibility assignments, related expense budgets for each activity and, where possible, a resulting sales forecast for each activity. It’s not a big document; it’s a list.
- Basic business numbers. As soon as possible, do a sales forecast. Then an expense budget. And for startups, list your startup expenses and startup assets. Yes, you should be aware of cash flow, but if you start tracking these basic numbers, and reviewing and correcting, you’re on your way.
The complete formal business plan, as a document, has more than just the above. That’s OK, though, because in the meantime this is enough to get you going and have you enjoying the benefits of business planning–without making the plan, or not having a plan, a reason not to move forward.
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Tim, I’ve found our formal business plan is almost never referred to (after only a year in business.) But we keep an informal plan in the form of an electronic mind map (using free software FreeMind) We look back at this plan again and again. It’s quick, informal, and easy to see how parts of our business relate to one another. This particular program also allows us to export an outline so it’s easy to draw up something more formal if needed. For an entrepreneur with little time to spend on updating ‘living documents’ we’ve found it quick easy to add and delete from our plan-as-we-go map.
In general, I’ve found that most entrepreneurs don’t need a formal plan to run their businesses unless they are raising capital. However, the one planning area that must be kept up with that many entrepreneurs ignore is cash flow. You should have an almost exact idea of your cash flow for three months, a good estimate for six, and an understanding of the direction your cash flow is moving for a year and more. There are many successful entrepreneurs (and some really big investment banks) that are caught in a huge bind when they owe money, but just don’t have the cash.
I can’t wait for this book Tim!
So many people get totally overwhelmed at the thought of doing a big business plan. So they either don’t move forward with the business at all, or do so with no plan. Both approaches leave a lot on the table!
Good luck with your writing.
-Pam
You DO need a business plan, BUT:
The business plan should be a document for your use. Write it with you and your employees as the audience.
Use a format of your own choosing. There are some things that a business plan must address: competition and competitive advantage, sales and marketing, and cash flow. But, maybe your business plan just consists of a file folder full of printouts, menus, and maps. That’s OK, just make sure that you put some thought into your plan.