As a boot strapper, I used to be one of those people who scoffed at business plans. I thought, Why should I spend my time doing research and “looking at the numbers” when I can be moving my butt and getting stuff done?
Well, yes! There is something to be said for avoiding over planning. There are those people who will use planning as an excuse to stay paralyzed (if you are one of them, you know I’m talking to you!). They plan and plan and plan and plan, wanting every detail to be just right before they make a move.
That won’t work! Nope. You’ve got to get going.
On the other hand, running an effective business takes more than just mindless doing. Like over planning, under planning is another trap you can fall into. It is all too easy to rush around like the proverbial chicken with its head cut off.
Remember: you, the bright and beautiful entrepreneur — and this is especially true if you haven’t had formal training — must take regular time out for focused reflection.
7 Signs it’s Time to Write a Business Plan
All entrepreneurs should have “slow down strategies.” What I mean is, you have to build into your work life a way to stop doing, so that you can recharge your creative juices. (For a refresher, read my post about work/life balance and self-care.)
This practice, be it exercise, meditation, walks with friends or a hobby you enjoy, should free you up to hear your inner voice tell you it’s time to get a little more serious — and formal — about your business.
In case you need a few hints, here are 7 signs it’s time to write a business plan:
- You want a loan to move your business forward
- You aren’t getting the traction you want on your business development or marketing strategies
- You feel overwhelmed
- Your business feels chaotic and out of control
- You are worried about finances
- It’s time to take on a partner
- You’re not sure your business is headed the “right” direction
All of these are signs that you want to move forward, but you don’t have the clarity to do so.
The whole point of business plans is to give you, potential collaborators, and funders clarity about your business. If it make you feel better, think of business plans as a very structured, highly specific form of meditation.
Feeling clear about your business will empower you to make excellent decisions and move forward in the best possible ways.
Still Have Doubts?
But, you say, you don’t know how to make a business plan. Well, that’s right. You probably don’t. And you probably also, once upon a time, wet your bed and couldn’t tie your shoes. I’m sorry if this brings back difficult memories, but we we’ve all been there, so you really don’t need to feel bad.
In any case, those days are over (I hope!).
The point is, we’re all lifetime learners and the only way to do something well is to get started. Your business plan doesn’t have to be perfect. If it incorporates the 7 essential elements of a business plan, that is enough to get you started.
Once you have your initial business plan drafted, you are free to refine it and iterate as you and your business evolve.
The 7 Essential Elements of a Business Plan for Boot Strappers and Beginners
The nice thing about business plans is they are very predictable. Because they always include the same elements, it’s easy to find examples of them in books and on the web. I have included a few links to get you going in the resources and citations sections, below.
To sum up, here are the 7 essential elements of a business plan with explanations of what they include to get your creative and planning juices flowing:
- Executive summary. This element of a business plan is a one pager designed to give readers a snapshot of all that is to come. You will describe your business in a paragraph, including basic company information, provide a peak into how the business is run and how you are developing your products and services, your major competitors and the state of your industry as a whole, how you plan to market your business and essential details about your business’ financial viability.
- Business description. In the business description you also provide basic information about your company, but you will go into more depth. Again, this doesn’t have to be long, but it does have to be honest and accurate.
- Operations and management. This section describes how the business is run, provides biographies of key personnel and gives details about who does what, and why, within the company structure.
- Design and development plan. Your design and development plan describes how your products and services are created. This is an opportunity for you to reflect on your own production process. Imagining how your audience will view this process will help you refine improve it.
- Competitive analysis. A competitive analysis provides facts about your industry, competition and market. This is where you get to talk about how you fit into your industry as a whole, how healthy your industry is and your strengths over your competitors.
- Market strategies. This section details your target audience and how you will bring your message, products and services to them. Thinking this through carefully will allow you to be far more effective with your marketing efforts than merely “winging it.”
- Finances. If you are seeking a loan or a partnership, there is no more important element of a business plan than your finances. In fact, it’s said that many people skip to the “financials,” read those first, and only read the rest of the business plan if they believe the finances are sufficiently solid. This is an area in which the ostrich approach just doesn’t work!
Writing a business plan can be a little intimidating, especially the first time, but doing the research and getting your thoughts and plans together all in one place is a worthwhile exercise and a necessary one if you want financial backing or partnerships.
Pitfalls to Avoid
While you don’t need to be perfect the first time you write your business plan, here are some things to avoid, especially if you are going to be looking for loans or funding:
- Vagueness. Make sure you describe, right away, the pain points your products and services will be solving.
- Inaccuracy. Research your business plan carefully. Investors are experienced at reading business plans and will spot poor research.
- Truth-stretching. Don’t do it. You will ruin your credibility. Stick to the truth, and nothing but, even if you feel some elements of your business plan are weaker than you’d like.
- Typos and poor design. Make sure your document looks good and is error free.
Alright! I think you’re ready to write a truly great business plan.
Your Turn
Have you written a business plan? Give us tips and encouragement in the comments section.
Resources
- https://www.enloop.com/: This business plan writer website is based on a “freeium” model. It is a great way to get started.
- Small Business Association: The Small Business Association provides online tutorials as well as mentoring. Check out their site.
- Google “how to write a business plan.” You will get more resources than you’ll know what to do with!
Citations
http://www.entrepreneur.com/article/38308-7
http://artsandcrafts.about.com/od/businessplans/tp/elementsbusinessplan.htm
http://blog.startupprofessionals.com/2012/08/these-10-key-elements-make-business.html
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