242: How to Write a Business Plan

As a coach, I hear the same things over and over again. I commonly receive questions about writing a business plan. Why should I write I business plan? How should I write a business plan? Who will see my business plan? When should it be written or reviewed?

Let’s go ahead and dispel the fear and worry surrounding your business plan. First off, should you actually go to the trouble of writing a business plan? My answer to this is a resounding yes! It’s important to write a business plan for a variety of reasons, but first and foremost, write a business plan for yourself. Write a business plan to take all of the moving pieces out of your brain and fit them together. You are the visionary of your company and you need a vision that is tangible. Taking  all of your ideas out of the mental realm and putting them on paper closes any gaps. You’re able to see where there are issues with your ideas, or how things don’t line up. Seeing the good and bad is important. It also gives you great direction. It adds a level of clarity that is unmatched. Your business plan will allow you to flush out your idea and make it real. Is this a business that will actually work? A good business plan will show you this.

Next, let’s talk about how you should write your business plan. I recommend that you start with a one-page business plan. The reason for this is it’s relatively easy. The one-page business plan is a total overview of your ideas and concepts. It allows you to see where there may be holes. If you have a good strategy for products, but do not have a marketing strategy, that will be an issue. If you have a great sales strategy, but aren’t able to decide who your target market is, or the people who will purchase your product, that will be an issue. This one-page business plan gives you a snapshot of your ideas.

After, you’ve completed the one-page business plan you next dive into a full blown business plan. This is a plan that should be full of details. It’s the in depth true look at what you’re creating. Think of the one page business plan as a completed meal. If someone were to ask you what you were eating, you’d say, “I’m eating Chicken Parmesan.”  The full length business plan is the recipe for that meal. If someone tells you what they are eating a picture will instantly come to mind of that meal. However, if someone gives you a recipe for making that dish you will have a true understanding of exactly what they are eating. This full length business plan is your business recipe. It’s everything that you’ll need to think about and do to start a successful business.

To get started with this plan, I recommend doing a web search for one-page business plan templates, and next business plan templates. There are some wonderful resources online for free. These business plan templates will ask you questions and step by step you complete the vision for your organization. If you get stumped and aren’t sure how to answer a question, you can do one of two things. You could realize that you don’t know everything there is to know about starting a business and do a subsequent web search for the answer, or you could decide that you don’t need to know that information, or that it’s not pertinent to your business and skip it. Either option could be the correct choice for you.

Once you’ve written your business plan what do you do with it. If you are attempting to get financing to start your business a business plan will be a necessity. A bank or investor is going to want to see that you’ve fully thought through the process of running this business, who you will service and how you will profit prior to giving you money. If you aren’t attempting to secure financing then the only person who needs to see the business plan is you. My recommendation is to write the plan and then review it every two weeks for the first three months and then move to reviewing monthly for the first year of your business. You then can move to every six months and then to annually as your business grows. When you review your plan, if something has changed, make that change to your plan. The constant focus on vision will allow you to be the true CEO of your organization. You’re the one who has the concept for this business, it is your brain child and it should be treated as such by you.

Writing a business plan can seem overwhelming, but I firmly believe part of the reason businesses fail so frequently is the owner fails to plan. The failure to create a roadmap that will be a guiding force for their organization leaves it directionless and straining. If you fail to plan, you plan to fail. Jump in! It’s not nearly as difficult as you think and it will help you immensely as you startup your business.