I am often asked why business owners have a business plan. Why spend time planning rather than ‘just getting on with the business?’ My answer is simple …
“So you know where you’re going, and you know how you’re going to get there.”
But I’m also a big one for creating a plan that works for you. The planning process I swear by may not suit your personality type or your business context. So rather than get ‘caught-up’ in the right ‘format’ of a business plan, today I want to outline the key elements of the business plan.
1. The Business Model – how do we actually make money?
Obvious? Maybe, but I so often see business owners struggling to make money, simply because they never clarified how they are going to make it. They focus on ‘doing their thing’, but forget that somewhere along the line they need to get paid. The business model conversation is bigger than just ‘selling x-product or y-service’. The business model is how you reach your market, convince them you’re worth talking to and ultimately why they should buy your wares. It’s about exchange – what do you receive in exchange for what you give? This is also bigger than the ‘marketing function’ of the business, which is where most people put their focus. This business-model conversation is actually about brand, strategy & operations combined in a synergistic, leveraged flow. It is the exploring, designing & building the business model that helps you discover the viability of your business.
2. Realistic Action Plans – what are we going to do in the immediate future to get closer to our targets?
3. A context-check, or what I call ‘life-sandbox’, is extremely important for solo & micro business owners, but is often missed.
This life-sandbox is the reality of your life into which your business fits & exists. Most planning processes address the business in isolation to the owners’ lives, so we set lofty goals that are incongruent with our life-reality.
4. Finally, a visible, meaningful scoreboard.
It would be incredibly boring to watch a game of football if you didn’t know the score, yet business owners do this all the time. Many business owners only look to the financial scorecard. That’s not always enough. Your business plan needs to drive the scoreboard, which in turn drives performance. In terms of format, I’ve been using different ‘one-page-plan’ formats for years and am a big advocate for keeping things simple. However, there are times when a more traditional format is valuable. It’s your call. Just make sure you have some kind of plan in place and that the essential ‘inclusions’ are covered. A business plan that doesn’t address the essentials is a waste of time.
