You’ve got your business idea. It might even already be an up and running business. But you’ve reached a point where you realize one of the following:
- You (and your team) are spending time on so many things. In fact, you’re very busy. But you’re not really getting any closer to where you want to be…
- Your business doesn’t seem to have direction. Or actually, your business has a new direction every day! It’s getting confusing, frustrating and very tiring for yourself and your team.
- You just don’t know where to start. You know where you want to be, and you can articulate that well, and paint that future picture in such a way that everyone you speak to gets excited about it, too. But how do you get there?
If any of the above scenarios resonate with you, then there’s one thing you need: a business plan.
And by the time you get to the end of this article, you’ll understand exactly what a business plan is, and hopefully be one step closer to creating one!
Everyone needs a business plan.
A business plan is a document that outlines what your business will produce or deliver, and how it will do it.
You can also develop a second, more detailed, part to your business plan which provides you with an action plan outlining all the steps you need to take to get you from where you are today to where you want to be.
Most entrepreneurs struggle with getting their businesses set up successfully because:
- They haven’t thought through all the strategic elements of their business, so their business idea may not necessarily be competitive, or even something that customers need (and will purchase).
- There is so much to do that they get overwhelmed and do nothing.
- They start working on and spending time on things that aren’t necessarily going to get them to where they want to be. This is when people are busy but not smart about what they’re busy doing. It happens a lot, and it’s discouraging, to say the least, when you’ve spent your days working, working, and working some more, but your goals are still so far away.
This is why spending time up-front to think through your idea and create a business plan will go a long way in ensuring your success!
What is a business plan?
Business Plan Definition: A business plan is a document that outlines what your business will produce or deliver (also known as what “value” it will provide), and how it will fulfill that goal.
I like to think of business plans as two parts. You will always need the first part, whether for yourself or for pitching to investors or potential business partners. But the second part is what proves to be extremely useful when you’re feeling either stuck or overwhelmed – i.e., when you just don’t know where to start, or when you’re so busy but not getting anywhere.
The basics of what a business plan is:
You will always need to make sure that your business plan clarifies your thinking, outlines your medium-high level plans for your business, and, if needed, can be used if you’re looking for investors or partners. I’ve outlined what needs to be included in a business plan below.
The extra part in a business plan that really helps you towards making your dream a success:
I’ve found that a business plan which also goes into detail with all the little steps – the action items – that you will need to accomplish to get to your end goal is something that almost ALL entrepreneurs need. It gives you clarity on what you should be working on, how you’re actually going to make things happen, and provides you with a clear roadmap that you can cross items off (or add items to) as you go along. And we all know crossing items off a list gives you that much needed accomplishment boost every now and again, doesn’t it?
So to summarize, a business plan always covers the medium to high level plans for your business (i.e. what you want to accomplish, why it’s a great idea and how you’ll do it). But, if you’re like most people, you’ll want to take it a step further and break down the “how” into action items that you can use to make sure that everything you (and your team, if you have one) are working on is getting you closer to that goal you want to achieve.
What does a business plan include?
A business plan includes several important pieces of information, such as your business objective, your product/service description, a market analysis, a clear idea of who you’ll be targeting (your Ideal Customer Avatar) and your plans and KPIs (Key Performance Indicators) across some strategic pillars: Sales, Marketing, Product Development, Financials, People/Team, Operations. Lastly, your business plan should include an assessment of potential risks, and what you could do should any of them arise.
In short, your business plan should give someone reading it a really good idea of what you do (or want to do), why you think it would work, and how you’re going to make it all happen.
Now that we know what a business plan is and what it includes, let’s look at why you might need one.
Why do you need a business plan?
There are two reasons why you need a business plan.
The first reason is to help you get clarity on your business and your strategy. This will help you articulate what your business will deliver, why it’s a great business idea, what your position within the market will be, what your competitive advantage and USPs (Unique Selling Propositions) are, and how you will deliver that product or service across several areas such as Sales, Marketing, Product, Operations, Financial and People (your strategic pillars – which may be a little different from these, depending on your specific business needs).
A business plan is also absolutely needed if you’re planning to go to investors for funding or are looking for someone to partner up with. This is the one document investors or VCs will expect – across the board. So if you’re planning on getting funding, it’s time to start working on your business plan!
But, business plans are also needed to give you clarity. And when I say you, I mean you, specifically! So even if you’re planning on being a solopreneur, and you don’t need any funding, it’s always a really good idea to put a business plan together so that you can get really clear on your business proposition.
And that clarity will prove to be useful across so many of your business areas such as your sales strategies, marketing strategies and copy, business operations and setup, supplier and partner choices, and more. By going through the business planning process, you’ll get really clear on what your business will deliver, to whom, and why it’s a great idea.
By going through this process, you’ll uncover risks you might have missed, opportunities you hadn’t seen, and get visibility into exactly what you need to do to achieve your goal.
And lastly, when you take your business plan a step further and create a detailed action plan out of it, you will be mapping out all the action items that need to be done to get you from today to your end goal. You’ll be able to view which action items are a priority, which ones are dependent on other action items, and which activities you spend time on today that don’t contribute to your goal at all.
How to write a business plan
It may seem complex at first, but trust me on this – a good template and thoughtful prompts, probing questions and experienced guidance will make it easier. If you’re anything like me, you’ll even find it fun!
Action: Write your business plan
If you haven’t yet written a business plan and would like the clarity that it brings, there’s no time like the present to get started! My suggestion is to create the outline first, then start filling the sections in with the information you already know. You can then research, think, decide and refine as needed. Good luck!
If this topic is something that interests you, you’re going to want to sign up to my free Strategy & Business Planning webinar. It’s going to be a live webinar in which I’ll explain the differences between strategy and business planning and take you through both. This webinar will equip you with the foundation you need to set your business up for success so you definitely don’t want to miss it.