Creating A Business Plan That Means Something
Creating a business plan gets a bad press in my opinion! It's often done as a paperwork exercise, usually for the bank, or another funder, to prove you know what you're talking about. But take a minute to think about that. Maybe it's less of a pain than you first thought? Maybe there is a reason these grown up and sensible organizations need you to produce one?
They aren't just being awkward. A business plan is often the difference between success and failure. Especially for small business. And especially for new, small businesses.
My advice is not to get distracted by the jargon, and be careful of who you listen to when it comes to putting a business plan together. It's not about hitting certain marks, or covering all the bases. It's about putting together a living breathing document you can refer to when times are tough and you need to take a moment to refocus on what's important.
The Dangers Of Leaf Painting
I like to call certain ‘strategic’ work ‘leaf painting’. That is work that's really designed to make the tree look pretty, and that pays no attention to the roots and branches of the tree. In other words, surface stuff, that has little bearing on the values and ethics of the business.
So preparing the plan just for the bank or an investor is a massive wasted opportunity.
Approach the task with the view that this plan will actually be a useful document. One you can share with the bank and investors for sure, but also one you can share with your teams and customers too. When creating a business plan remember it should be a short, concise and accurate portrayal of the current situation and the place you want to get to. And importantly, what you think you have to do to get there too.
The customer
Whether you put a ton of research (recommended) or just guess and use instinct, its vitally important that you have identified the customer you want to serve and the problems they have that you can solve.
And avoid so called ‘demographics’. I’ve still never met a 30 - 50 year old man or woman! They are a construct, useful in some ways to be sure, but less so when it comes to picturing your ideal customer and the challenges they face that you can solve.
Be really specific. And use your imagination. Paint a picture with words. Think around the subject and consider what music they might like and where they work, what car they drive and so on. The more information you can put together at the start, the better realized your plan with be.
And don’t worry. You can refine it and make it more and more accurate as time passes.
Your Product
What does it do? In terms of what are you going to describe it as. Keep it simple, stupid. Apple learned this lesson early on. The newspaper advert for the ‘Lisa’ computer, the precursor to the Mackintosh ran to many pages! The Mac - one simple slogan - Think different!
How much will you charge? And how will people pay? How will you collect the money, and get the actual product to them? Will you guarantee it? What colors is it going to be available in?
The finances
Where is your money coming from? And how long is it going to last? What level of sales do you need to hit in order to achieve what you want to achieve? How are you going to achieve that level of sales? And what are you going to do if you don’t achieve that level of sales?
If you lack the input of an experienced CFO on your management team, it can be an expensive acquisition. So a service like CFO on speed dial is worth its weight in gold. A good CFO will not only make all the difference when creating a business plan but also when implementing it and making sure you sure on a solid foundation for your business.
The people
One of the most overlooked factors when it comes to panning. What people do we need? Where are we going to get them from? How are we going to train them? What are we going to pay them?
And perhaps most importantly of all, how are we going to develop them, and replace them as they progress through the business and into greater roles with us, or the competition!
People are a business's greatest asset. But don't make the mistake of leaving it all to brilliant people! The reality is, you will have some brilliant people, some average people and you know what? Some people who don't make the grade.
So how are you going to plan to mitigate for this? What's the plan to attract, recruit, reward and develop the best people? And how are you going to make sure the business has strong systems to make sure it will succeed, even if we have our fair share of the average and indeed the sub optimal!
Creating A Business Plan Is That Important
Please don’t leave creating a business plan to chance. Plan it. Plan for the worst, and hope for the best! And use that business planning process the banks are insisting on to do it. Don't waste the opportunity to get a really strong structure in place, and at the same time convince everyone you really do know what you are talking about!
TAKE THE CHALLENGE
Choose the challenge that is your top focus
Begin by brainstorming 3 opportunities, challenges or decisions that weigh on you, slow you down or keep you awake at night