Business Plan: Pt 1
It is generally advised to write a business plan BEFORE starting your business. But my story is a little bit different. I fell into my business, and it steamrolled ahead while I reacted and just struggled to keep up. It’s only been more recent that I’ve decided to be proactive and get two (three on a good day!) steps ahead of CYL. One of the first steps I took in doing so was to write my business plan. This has helped me to focus on details; consider things I wasn’t before; and calibrate my business so it would not only be successful but so that I would be in control of how it grows.
In January we spent a lot of time mapping goals, and earlier this month we thought about our mission and vision statements. Both of these things are great prerequisites to creating your business plan, since your plan is essentially a very organized and thought-out roadmap to those goals and objectives. Your business plan will explain why your path for your company makes sense, the resources needed to see it out, the people and skills involved, and the route.
This post is the first of three parts, all building up to writing your own business plan! This first part we are going to explore some of the myths about business plans. In the second part we talk about the components of a great business plan in more detail. And in the final part I will give you the tools and templates to create your own business plan.
So let’s jump in and debunk a few of the common misconceptions!
BUSINESS PLANS ARE ONLY FOR PRE-LAUNCH COMPANIES
At any stage of development you can create a business plan. Aside from it being an excellent road map, they are also important if you are trying to get financed or investors: if you are trying to expandyour company; if you are bringing on additional people or partners; and for the overall improvement of your financial and managerial success. If you have already been in business for one year, or ten, drafting a business plan can still offer benefits in helping you reach that next stage.
For instance, in my case, I created a business plan 1.5 years in because I wanted to quit being reactive to my business, and instead have control of my growth and success.
BUSINESS PLANS SHOULD BE 100+ PAGES, AND THEY SHOULD BE PAINFULLY LABORIOUS
One, nobody (investors included!) wants to review an excessive amount of pages. The plan should be focused and concise. You should cover the information you need in simple language, and then get out of there!
BUSINESS PLANS SHOULD ADHERE TO A REGULATED FORMAT
Not true, at all. We operate in a different world than many other businesses. You may need to cover things specific to your business, that typically are not a factor. That is okay!
YOUR BUSINESS PLAN IS A PLACE TO DREAM, NOT A PLACE FOR REALITY
While your passion for your company should come across to the reader, this is also a place for reality and credibility. You should honestly share your challenges and potential risks and your plan to address them. This will have a positive impact on people who are reading your plan. An honest assessment of your company shows a sense of experience and professionalism. Unlike your vision statement, this is not a place for vague language and lofty ideas that are not substantiated.
I ONLY NEED A BUSINESS PLAN IF MY COMPANY NEEDS TO RAISE MONEY
While yes, many business plans are written with the intent of raising capital, this isn’t the ONLY reason to have a plan. Like I mentioned a business plan is a great managerial tool; it can serve as a roadmap for your company and prepare you for challenges; a realistic evaluation of progress to date, as well as progress towards future goals; a solid starting point for strategic development and growth.
We can’t totally predict the future of our company, but the better the business plan and analysis the more likely it is you will hit you goals and grow a successful company. Stay tuned later this week as we talk about the things you need to prepare for writing your own business plan.