This is a guest post from Sarah-Jane Quick of BusinessNanny.co.uk
Do I really have to write a business plan?
YES, YOU DO! Producing an accurate plan (yes, before you start!) will prove if your business is feasible or not. And if you need funding, investors will want a detailed plan to make sure they’re not giving funds to an idea that’s deader than a dead thing…
So understanding your chosen market and making cashflow, sales and other financial forecasts will prove if your business will work – and how easy it will be to make money from it.
Uh-oh, cashflow and spreadsheets? Am I losing you already? It’s so easy to put things off when a job is unappealing, or daunting…and I don’t want to scare you off.
So let’s see how your brain’s wired first
1. Do you pathologically hate the idea of writing a business plan despite everyone saying you need one…?
2. Do spreadsheets and figures send you boss-eyed?
3. Do words like business plan, cashflow, forecast and balance sheet make your skin break out in a rash?
5. Do you prefer colours, images, smells and feelings to analysis, spreadsheets, tables and templates?
4. Do you have a big passion and equally big vision for your business but are struggling to see it through?
6. Do you want to make a positive impact with your business but artfully side-step the “business” side of your role?
7. Is planning boring (and daunting) – and anyway, you think it gets in the way of the “real work”?
8. Does the formality and nitty-gritty of traditional business plans bore you witless?
9. Do you believe there’s got to be a better way to run a business than writing about it?
IF YOU AGREED with any or all of these, don’t worry, you’re not a bad person. You’re just a “right-brainer” who finds other things important or more stimulating. Maybe you’re an artist, photographer, writer, or crafter, or a life coach, chiropractor, massage therapist, or yoga instructor. The business world needs you too!
If so, why not visit Jennifer Lee’s excellent business site for right brainers at rightbrainbusinessplan.com – Jenn has great FREE templates and spreadsheets that talk about “moola”, not cash.
And if it’s your thing, Jenn has a guided (business) meditation to help you dream up the vision for your business, not just how to price your services. (It could be quite useful to go through this…)
DISAGREED with any (or all) of these? Lucky you, you’re a “left-brainer”. You are as clever as a chap with three heads. Writing a business plan will be a breeze, and you will rattle off figures, forecasts and balanced scorecards like a true pro. Huzzah!
BUT, whether you’re a right- or left-brainer, time spent on your business plan is a totes no-brainer. Find your perfect vehicle, and push your pedal to the metal…
1) Cunning Plans need cunning Strategy
Start by focusing on products or services for a specific target market. Your strategy should be firmly centred around a skill, strength or passion you have that will bind you to your buyers – and your solutions need to set you apart from the rest too.
Try to condense your strategy into a single sentence, and test it on your customers. Does it make sense, and does it describe a UNIQUE business or does it apply to others? (If it applies to everyone in your sector, it might have to be back to the drawing board…)
If you’re stuck, ask yourself these questions:
- What problems do your products or services solve, and who will pay money for them?
- What is your market size or reach?
- Who has already bought from you?
- What’s your revenue model?
- Are you too close to the subject?
- How and where will you sell your products or services?
- How did your competitors get started, and how do they market to their customers?
- How will you find your customers?
- Is there room to expand your target market?
- What does your immediate social network think?
2) Fat versus Lean business plans
Now you know your Strategy, it’s time to start writing your Plan.
This should include an Executive Summary (a topline summary of everything in your Plan), details of your objectives, your product or service, your market, your competition, production (if any), marketing, sales, distribution, operations, management structure, and finance (including how you will meet your goals, and by when).
Whether you write a “fat” or “lean” business plan depends on whether the plan is a route map for you only, or written for investors, or if it’s to become the office bible for your team.
A “fat” plan describes each subject in depth, whereas “lean” plans are mostly images, less text and more bullet points, only going into detail if the subject is complex. Right brainers might feel happier putting together a collage to see their goals visually, but don’t be fooled into thinking that because they’re on the fridge, you’ve achieved them already – you’ve still got to work at it…
3) Track progress, stay on course.
You will get side-tracked by daily events sometimes, so make sure you regularly check your progress against your objectives and projections, and set “milestones” for outcomes you want to happen by certain dates.
You’re going to have to track your budgets, measure your achievements (have you been hitting your targets?), revise your costs and sales predictions if necessary, and include enough detail as to why you haven’t hit your goals to provide your management team or investors an adequate Plan-vs-Actual budget analysis.
Monthly projections are needed for at least six months, though 12 months would be better.
Don’t worry, right-brainers, you can do this! It’s like grown-up dots-to-dots – you’re simply tracking any sales made against “moola” spent – everything from rent to utilities to salaries, phone, internet (even office bikkies). You’re simply charting your progress, to see if you need to make changes, and if so, by when…
4) Purple prose and extra colour
It’s vital that your plan is well written and well presented – bank managers or investors will be put off by an unchecked document strewn with spelling mistakes. And where appropriate, step away from the template by writing for your particular audience, aiming for a happy medium between showing business-like formality and your passion and personality.
Keep your Plan concise (leaving detailed analysis for any Appendices), and avoid technical jargon if practical. Ask non-techy friends to read it through and give you their feedback. (If they get what you’re saying, you’ve got the level right!)
Of course, how you structure your Plan depends on your audience – but if you need investors, you might need several different versions of your Plan. So your version for your investors might also include your backstory, and those of your core team. (You may also want to outline what size shareholding investors will get in return for their investment, and the reasoning behind your decision.)
But whatever you include, forests of text are off-putting (as well as hard to read). Where you can, break the text up with lots of white space, diagrams, charts and quality graphics – which will convey your message more succinctly than a slew of numbers. (Even an accountant’s eyes can glaze over, so if the financials are very complex and detailed, trot along to Staples and get your figures run out to A3!)
If it takes 150 pages to lay it all out, so be it. Don’t be tempted to reduce it to 6pt text just to get it on 30 pages…
5) Keep in shape and up-to-date
You don’t stay in shape by skipping the gym for six months and then putting everything right on a 2-day bootcamp… In the same way, business planning is a continuous process, not a once in a blue moon event, when you remember.
Sarah-Jane runs Business Nanny, a local business support service serving clients worldwide. She has a strong logical streak and certainly creates order out of chaos, but is out and proud as a “right-brainer”…
You can collaborate with Business Nanny to achieve your goals too.
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