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If you are preparing to write your business plan, it’s important to give yourself plenty of time. You need to have some foundation pieces ready in order to cover the critical aspects of your business. This is the time to pull together the unique business value of your product or service, where you will find your customers and how you will market your brand. It should be a working document since most businesses remain dynamic and things do change. We all make assumptions in the beginning of a start-up that don’t necessarily have the same meaning after 1, 3 or 5 years in business. It requires you to assimilate the different parts of the business into a well organized document.
This is the time to put in writing everything that you know and even some of the things “you don’t know… you don’t know”. This is the time if you have partners, to solicit feedback from everyone involved. In fact, you can delegate to other members. It makes the work go much faster if you have more than one set of eyes on this business plan. Even if you are the sole owner of the business, you can reach out to your mentors and possibly investors to gather different perspectives.
The business plan will establish a point of reference that you can use in the future to gauge your progress.
It is kind of a game plan and will help you to monitor the successes and keep you on track. I have developed numerous business plans over 30 years. The first one I did was recommended by my mentor and I didn’t even realize the significance at the time. I was quite accustomed to planning after ten years of experience with Motorola and yet I did not see the importance the first time around. When I reviewed the plan I had put together after 6 months, I discovered that I had strayed from the “plan”. In this case, I was somewhat lucky as I had fortunately launched a company at the best of times and had two large contracts to feed the business.
In the third year, things changed quite a bit and once I had more employees, a range of contracts and became very busy, I lost track of the premise of the business. I was noticing that decisions were being made that were not in the best interest of the company. When I looked back on the original business plan, I was able to re-evaluate the core competencies and fix some of the things that were not working efficiently. In fact, I realized that I had started making decisions based on whatever was influencing my company at the time instead of what was best for the principles of the company.
The interesting thing was that parts of the business plan were naive and did not make sense because the industry was changing. Instead of sticking with the original concept of the strategies for success, I had made decisions based on the influence of other people. The end result was that I had to pare down a couple of product lines and focus on the core, the ones that the company was founded upon. Fortunately I was able to do so without much blood-letting and my original contracts were saved and started to flourish again.
A business plan may be one of the most important documents you will create for your business. I would recommend, based on twenty years as an entrepreneur and four companies, that you overhaul your business plan at least every six months. This is where the “work in progress” aspect comes in. If you expect your business plan to continue changing you won’t be disappointed. This document is meant to flow and move with the “ebb” of your business. Constantly changing, you need a foundation piece to measure success, and failure.
As you review the projected revenues for your business against the real or actual numbers, you can determine what may be working and what may need to change. It can be considered a kind of “report card” and every semester representing, one Quarter. Your original thoughts as you wrote them down when you started will more than likely have changed a fair bit. The question is whether the changes are positive and worthy of blending them into a revised business plan or it may be time to make changes so you continue to align with the reasons you started the business in the first place. Are you on target or not and what needs to change?
There are numerous documents available that you can follow. I’ve seen two-page business plans that are very basic but in some cases work to help you focused on what’s important. I’ve seen very extensive and formal business plans that are 60 pages long and would be required for presentations to investors or to borrow money. It depends on how you perceive your company in the sort term as well as the long term.
As a business coach and entrepreneur with four company start-ups, I’ve lived through one that was wildly successful, in part to both timing and a little good luck. I’ve seen a business fail, in part because a large contract that was expected to fund the company disappeared and the owners decided the model would not work. Fortunately, I prefer to take baby-steps with the companies I consult to and the losses were minimal for that owner. It all depends on how you plan your business and how you depend on your business plan.
StudioIMI is a private company owned for twelve years by Craig Montgomery, serial entrepreneur, business coach and experienced sales and marketing expert (in-training for 25 years).