Business Planning like Building Blocks. 0

Think of your start-up business plan as a matter of blocks; pieces. You don’t have to have the whole block structure done before you take any next steps. Start your blocks where you like. Some common blocks are the mantra, the mission statement, the keys to success, maybe a break-even analysis, or a SWOT, or how about the whole discussion of “who needs it” and “why” and “how badly?” Any of these things are blocks. A sales forecast is a block, and so is an employee/personnel plan, as in laying out month by month how many people are working here in your hypothetical company, and how much each of them get paid per month.Blocks

The key here is that you don’t get bogged down on having a finished business plan. You hear the stories of people who spent months developing their plan, but never get started. So instead of that, think of the blocks.

Start wherever you like

The blocks idea also saves you from the tyranny of sequence. You don’t have to start at the beginning and work thorugh to the end. You can jump in and start wherever you want.

  • Mission statement, maybe? Define for yourself what your company will do for its customers, for its employees, and for its owners. Mission statements are a bit last century, perhaps doomed forever to Dilbert-related derision, but that’s still where some people start.
  • Maybe you’re a numbers person. That’s okay, don’t apologize, business planning needs that too. I was a lit major in college but I still like to start my business planning with a sales forecast. Then I’ll do some conceptual work, then back to maybe costs and expenses, classic budgeting work, then back to basics.
  • Business plans have hearts like artichokes do. In both, their hearts are their core, the best of it. The heart of a business plan is its marketing plan, meaning its identity, positioning, its differentiation, the sense of what business you’re in and why people buy. I like to call this your identity. That’s a great place to start.
  • Some plans start with a product or prototype product. Maybe your first block is a bill of materials for manufacturing the new thing. That’s okay too, that’s a block, you can jump in there.
  • There are lots more blocks. The mantra. The vision. A break-even analysis. A market analysis. A market forecast. Personnel strategy. Financial strategy. Some people like to build an equity plan first, focusing on how many shares exist, how many the founders get, how many the investors get.

Don’t worry about finishing

A good business plan is never done. It’s the launch of a planning process, and you want to understand from the very beginning that if you ever think your plan is done, your business is probably finished. Understand from the very beginning that you’ll have to review and revise regularly. Assumptions will change, your forecasts will be wrong, and the art of management will be figuring out when to revise the plan to accommodate changing reality, and when to stick to the parts of the plan that will work if you’re consistent but need more work. That’s paradox, of course, and that’s why we do it — owners and managers — instead of computers.

– Tim

About the Author Tim Berry is the founder and chairman of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry. Follow Tim on Google+ Read more »

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