What Makes up a Business Plan that Works

Everyone in business has heard of a business plan and has some vague idea of what it should include, but not everyone has the insight into what makes a business plan work or turn into a dusty stack of useless paper. Generally, the larger or more complex the business, the larger and more detailed the business plan.

While some argue that a business plan is for a new business or for a new or existing business looking to obtain funding, there are a number of other reasons for business plans or business proposals: existing businesses that are shifting focus or changing direction and want clarity, existing businesses that haven’t had certainty around what they do and existing businesses that need to define their purpose and create clarity about their intent.

Building a business plan is done by creating a few standard report sections:

– Executive Summary – designed to get the reader excited an engaged in the project with high-level answers to the subsequent information.
– Definition of who/what the company is (structure/partners/locations)
– Products and/or services the company provides and basics outlining these products and services, including how they are made and specific inputs/requirements for them
– Analysis of the market for the products and services (ideal customers/ existing customer base/ primary, secondary and tertiary customers)
– Strategy, including a review of competitors and the pros and cons of each competitors’ offerings, selling strategies, etc.
– Financial information (if the plan is to solicit funding) including amount needed, timelines, sources of funding, expected returns, etc.

 

Unfortunately, many graduates of business programs seeking out how to write a business plan find the information they need, write a plan, then file it away in a drawer and forget about it. The best business plan examples, however, are documents that are fluid and have emotion. According to Michael E. Gerber, in his article The Business Plan that Always Works on Inc., head-centred, static business plans don’t work.

“The business plan that will always work starts from a different place with a different set of operating assumptions,” he writes. “It starts from a heart-centred approach, which means it starts with experiencing the feelings you have.”

Gerber guides his clients through an exercise of imaging the business and dreaming about it. This explores why the individual wants to create the business, who benefits from it, what it means to the world and other emotional factors. By setting this baseline that explains the real need for the business, it’s easier to write an effective plan, even from a standard business plan template. Thus, it comes down to communicating the feelings within the template.

Gerber says, “The real difference between the business plan that always works and the traditional business plan is in how you think and feel about the plan – it’s your attitude and your relationship to the plan that will make all the difference.”

Exploring emotions and knowing the hows and whys of the business will also make it possible to roll with the changes and challenges that are certain to come. The last thing a business owner wants, is to be hit with a challenge that forces them to ask “why am I even doing this?” A person who creates a business plan in the style Gerber describes gives them constant knowledge and reinforcement of why they are doing what they are doing. Every single challenge, opportunity or change that comes up can (and should) be measured against this purpose. This will allow the business leader to know whether the issue before them aligns with the feelings that created the plan in the first place.

Living documents and where to find them

With that knowledge in place, look for business plan examples that can be used as templates but fit your emotional vision for the business. You don’t want your business plan to be a static document, you want it to move and grow with the business. That means it will require changes. Think of it as of a website. So often businesses build their website, take a look, see that it’s done, then sit back, sigh, check it off a list and leave it to stagnate. Businesses who understand the power of their website will constantly make changes. They might add new information, update products or services or change client testimonials to name just a few things. The point is that it is seen as a constantly evolving entity – your business plan should be the same; not necessarily changing with every trend or news flash, but changing when your feelings about the business change, grow and expand.

There are tools available everywhere for business proposals and business plans. When seeking the right one for your needs, look back to the emotional vision and find a template that fits the way you see your business being described.

Some tools include:

– A one-page business plan from Lean Canvas – this isn’t for everyone and is likely to require a bit of background, but in terms of forcing you to get to the core of what you’re trying to say and providing a visual impact on others, it’s ideal.

– Startup Pitch is a Power Point format that features an eye-catching visual display. It’s quite modern, perhaps too much for some, but it’s worth a look.

– Plan Cruncher is a neat tool in that it creates the plan by asking you a number of questions. You’re able to expand on these thoughts (in very short input sections) so it keeps you focused and guides you through the process.

– LivePlan is another clean and simple on-page style plan that is infographic based.

What becomes obvious from looking at these tool options is that in today’s environment, less is more. No one has time to read, re-read and re-write a 50-page business plan. Documents need to be quick, understandable and link to that emotional factor. There will always be backup information to support the one-page plans, but this too should be focused on brevity, consistency and staying true to the core vision.

As change occurs, nothing in a business can be static. In order to stay ahead of the changes and plan for them, rather than react to them, a business plan needs to grow and change too.