Creating the perfect Business Plan
by Fred Roed on 08/06/09 at 1:52 pm
27 comments
Small business owners, starter-uppers, entrepreneurial venturers and other mad-scientist-types the world over will understand this question: “Is writing a business plan even worth it?”
When starting World Wide Creative, as well as Art Revision, Heavy Chef and BugZapper, I know we didn’t bother. I’m not sure my Ideate colleagues over at Yuppiechef did either. So, did it make a difference? Would we have achieved success any quicker if we had written the 40 page document so keenly advised by Bank Managers, Business Consultants and Accountants the world over?
The other day a funny thing happened. I was invited to a free lunch* by a team of young, starry-eyed entrepreneurs. They wanted advice on how to make their world-domination idea a huge success. I felt a little uncomfortable with the admiration and adoration handed out by my acolytes… but then I got over it. So, after pizza and a few beers, I found myself saying something decidedly un-Heavy Chef – “Guys,” I said sagely, “you need to write a business plan!”
Wham – ! There you have it. A business plan. I actually said the words. And, mind you, without a hint of irony, or even a nervous glance at the clouds gathering above ready to lightning strike the hypocrisy out of me.
Afterwards, I almost choked and phoned them up: “Nooo! Don’t listen to me! Just read Screw it! Let’s Do it! and get on with it!”
And then, I settled down and reflected on the reasons why writing a business plan may not be such a bad idea. So, here’s a list of my thoughts, which I will kindly share with you (since Ideate is that kind of blog):
1. A business plan is the first step to the ‘Company Manual’ written about by Michael Gerber in his seminal book E-Myth Revisited (a good read, by the way, for those of you wanting to do business right)
2. A business plan should include costs and revenue forecast, which will make you understand how much money you can really make out of the thing. It’s important that you’re honest here. Or, if you’re trying to gain investment, exaggerate as much as possible.
3. A business plan is critical to get investment (see point 2). So many business ideas nowadays require seed capital investment – and believe me, there ARE investors out there. You just need to look… and have a business plan.
4. A business plan should also include a marketing plan. This must also make you think about how you will generate sales – especially in the beginning – and build your brand.
5. A business plan must make you define your brand correctly. “What?” I hear you say. “Aren’t brands only for big companies?” “Nope” is my slow, patient reply. “A ‘brand’ is merely the message you choose to convey. This message must contain a promise… and it should be a promise you can actually keep.”
6, A business plan should include a plan for expansion. Who are your suppliers? How many staff will you need? What agreements and contracts are in place? And how secure (read “watertight”) are those documents?
7 A business plan, finally and most importantly, should state, unequivocally, how your business differentiates. It is important to ‘think like an investor’ in this case. Ensure that you’re being realistic here – ask yourself ‘Would I buy from this company? Would I INVEST in this company? What is SPECIAL about this company?’
And there you have it.
A 7 step blueprint for creating the perfect business plan, posted by someone who’s never actually written one.
Ah, the beauty of blogging.
*There really is no such thing, by the way.
Fred Roed is the marketing guy in the Ideate crew. Fred is the CEO of web marketing company World Wide Creative and the co-founder of online learning portal Heavy Chef. Fred loves writing about people out there doing marketing right. Follow Fred on Twitter here. View more articles by Fred Roed.
Tags: business plan, small business
The Heavy Chef Project » Business Plans - do they matter?
Jun 8th, 2009
[...] I wrote a post on our sister blog, Ideate, over lunch with a 7 point list to ‘create your perfect business plan‘. [...]
Bruce Wade
Jun 8th, 2009
Wow, Fred with a business plan, I am impressed. There is hope of a formal education in there some where.
I am all for the fly by the seat of your underpants way of doing business, but I too have advised some of our clients to stop and write something down.It is critical to success and some people do not have the ability to keep a plan in their head and still maintain the full picture. So either write it all out or hire me as your Entrepreneur Coach (plug plug)
Urban Angel
Jun 9th, 2009
I have just decided to start up my own business. My business is service driven and my product ‘Inspiration and Empowerment in the workplace through reaching physical goals’ – unique concept and definately not done before. I needed to put it down on paper to make my own personal goals clear and have found that is why a business plan is so important. Thank you for the step by step plan. Will make use of it in my business. – Urban Angel
Fred
Jun 9th, 2009
@ Bruce – I personally regret lack of planning for some of the things we’ve done, but also appreciated the school fees with the lessons.
@ Urban Angel – thanks for the comment, good luck with that business.
Pete Flynn
Jun 9th, 2009
Nice one. Yeah most of our businesses were built seat-of-the-pants but in future we will be looking for a decent business plan from the person driving the business.
A great online tool we found is http://www.planhq.com/
Liza
Jun 9th, 2009
3.5 years into running a business I bought I only now know what EXACTLY I want to do, how and for whom. So writing my business plan only now makes more sense for me.
Fred
Jun 10th, 2009
@ Pete – nice site that planhq.com site. Thanks for the link.
Business Plan Pro
Jun 12th, 2009
Hi Fred, We’ve been promoting the importance of business planning for a long time through our articles and blogs
( http://www.bplans.co.uk ). One point to add is that business planning is important for all companies (even though it is synonymous with start ups).
What is a Business Plan | Business Investment Plan
Jun 26th, 2009
[...] Creating the perfect Business Plan [...]
mark powell
Jun 27th, 2009
Hi, just took over a non-franchised motorvehicle workshop and I am looking for good business plan ideas including marketing.
Bruce Wade
Jun 27th, 2009
This article and other similar discussions has prompted me to assemble a business plan template that has all the required parts and functions required by banks, VCs and business investors. It also covers all the aspects of a startup business in South Africa.I have used it with 5 different clients in the last 3 weeks to help them get set up and focused on their new venture. So thanks Fred for prompting this and if anyone wants a look see then pop me an email and we can connect.
Pitch your business ideas here (and make South Africa proud) — Ideate – Small Business in South Africa
Aug 25th, 2009
[...] in the form of an interactive TV show called “PitchTV” where you can submit your business plans, in video format, to stand the chance of getting your idea funded (or nicked, I [...]
Donovan Muirhead
Oct 6th, 2009
To echo on what Fred has said, writing a business plan sets the blueprint to any venture, even if its just to bring on a new product or service line, or evaluate an existing one. What we have often experienced with our learners is that the Idea you have in your mind about your venture looks very different once placed onto paper. Time and again further opportunites present themselves within the business plan writing process. Having authored over 70 plans myself for a number of various ventures and projects, writing a business plan does become easier, however Do your research thoroughly, don’t “thumbsuck”…
Fred
Oct 6th, 2009
Thanks for the insight Donovan, that gap between the reality and the plan is actually what’s stopped me from ever writing one – but I think the next venture I start, it has to be done.
CEO
Oct 27th, 2009
I recently started my own business in Cape Town, and can almost agree with this article. One thing every business entrepreneur needs to know is that 2-3 months into the business one starts adapting to change and the market, new competition and technology, social media updates etc. and every meticulate detail in the business plan changes.
Its great to get your mind straight about what you’re going to do and to get funding – but you need to understand change is inevitable, in your product, projections and even your very target market!
Fred
Oct 28th, 2009
@CEO – agreed! change is not only inevitable, it also keeps the entrepreneur interested : )
Michiel Jonker
Nov 16th, 2009
I agree with you. I do think a business plan is key, especially when you are trying to get investors. But I also think a tip you should mention is to have a TRUSTWORTHY source review your completed business plan before showing others.
My wife and I have been running our own business for years. And we had a business plan but since the economy took a fall, we decided to have an outside observer review our original business plan. After doing so, we realized we didn’t address, in writing, how to earn profits even during the rough times we live in today.
So we went back to our plan, made edits, and added how to earn profits under such circumstances. Once we did tthe profits started flowing again.
So hope this benefits your readers as much as it helped us out!
Fred
Nov 17th, 2009
Great point Michael – you’ve highlighted a trap that most of us entrepreneurs fall into in all spheres of business… doing everything on our own & not seeking objective outside advice.
elemental
Dec 4th, 2009
Thanks for the read!
I really believe in any business planning is the most important thing from small tasks to the bigger picture.
Appreciate this really good article, keep em coming!
Lsmith
Dec 12th, 2009
Great post – there are some really solid reasons why writing a business plan is beneficial (even if you haven’t had to in the past). In any respect, even if you don’t hand your business plan in to a bank or potential investors, it’s a good way to organize all your thoughts, and make sure you know what you’re talking about. Keep it short and simple – you can’t go wrong with a simple business plan.
Top 10 Ideate articles in 2009 | Ideate
Dec 24th, 2009
[...] 5. Creating the perfect Business Plan [...]
Business Plan 101 | Ideate
Feb 2nd, 2011
[...] since Fred wrote the article “Creating the perfect Business Plan” on Ideate back in June 2008 we have had comments galore and discussions late into the night [...]
Tshalis
May 12th, 2011
Is a business plan always needed or worth it in order for a business to start?
Tshalis
May 12th, 2011
I think that he has taken a big step in his life and yet he knows that the desicion he has made will lead him to greener pastures!!!!!!!!!!
Fred Roed
May 12th, 2011
Tshalis – not sure if it’s always needed, but its definitely worth it.
Crafting A Business Plan, For Freelancers | Ideate
Feb 6th, 2012
[...] Creating The Perfect Business Plan [...]
LivePlan.com
Feb 20th, 2012
Hi Fred,
While a business plan gets some bad press (largely due to the time taken to complete) there appears to be universal acceptance as to the importance of planning.
Since launching http://www.liveplan.com we have been over whelmed by people looking for a simple business plan product.
best wishes
John