Writing a business plan becomes a major stumbling block for many new entrepreneurs. They read all the articles, books, blogs, and other drivel about importance, formats, contents, “do this–don’t do that” stuff, and then stress out about writing a formal business plan.
If you are someone worried about writing a formal document…consider this:
“I have always found that plans are useless, but planning is indispensable.” –Dwight D. Eisenhower
The point I want to make here is that for the great majority of the 6+ million new businesses that will startup this year…a planning “document” is not necessary and is a waste of resources. At the same time, however, “planning” is absolutely necessary for every single one of them.
Having said that, I am well aware that if you are expecting to start a high-tech company to knock off Google or Facebook, you will need lots of venture capital, and VCs require a very formal and expansive business plan, as well as a top-notch presentation (should you get that far).
But these “darlings” of the startup world are only a small percentage of all the businesses that will be created this year (and every year). If you are reading this article, and hoping to start a business, it is highly unlikely you will need to write a formal business plan.
You will, however, need to do some pretty detailed, “planning.” The purpose of this planning is to develop a fairly detailed strategy that you will continually modify as you move ahead.
Here is what you need to include in your strategy planning:
1.) A Strategic Outline. You need to understand what your strategy is going to be to build your business. This outline only needs to be complete enough to manage your business–no one else (other than your advisors) is likely to every see it.
2.) Work Out the Basics. You will need to clearly understand your market, and do whatever market research is necessary to accomplish that. You will also need to develop forecasted revenues, and detailed expense estimates…both to start your business and to operate it. And, of course, the most important of all-you will need to determine how much money you will need to start your business.
3.) Use Your Resources. You should have an advisory board, or group, assembled to assist you through this planning process. A good advisory board can mean the difference between success and failure of your business–so use them, especially when planning your startup.
4.) Never Stop Planning. The less formal you make your planning, the easier it will be to make frequent changes to it, based on your on-going experience with the business. Updating your planning frequently also provides the opportunity for you to review your thinking and see how that has changed since you first started.
So, in essence, don’t sweat the thought of writing a mighty tome about your business idea (unless you are looking for venture capital), but be sure to do a thorough job of “planning” your business. Remember, you are always planning, and how you record your business planning is strictly up to you. Cocktail napkins, whiteboards, butcher paper, etc., are all fine.