In fact, it’s possible to write your initial business plan in less than an hour. After all, you’re always thinking about your business and the strategies you’re going to use to grow, so getting those ideas down on paper shouldn’t be hard—it can even be an enjoyable experience.
Listen to Peter and Jonathan discuss this article and try to make their own business plan on the second episode of The Bcast, Bplans official podcast:
A new kind of business planning
A business plan no longer needs to be a long document that takes weeks to write and research. It’s not something that you print, bind professionally, and then stick on a shelf. You probably only need a formal, traditional business plan if you’re seeking a bank loan or outside investment—you’ll be expected to provide one in those instances.
But for most businesses, business planning should be a simple, ongoing process that helps you discover your ideal business strategy. It’s a lot less about putting together a document, and more about frequently reviewing your strategy and financials so you can respond quickly to challenges and opportunities. Plus, just doing the process of business planning has been scientifically proven to make you more successful—and there are a lot of other reasons why having a business plan is important as well.
I encourage you to embrace a concept called Lean Planning—it has all the benefits of traditional business planning without the pain and hassle of creating a long business plan document.
You’ll start with a short overview of your business—a Lean Plan. It’s your business strategy, written in brief, with just the essential business plan components, so that you can update quickly and easily as you learn more about your business, your customers, and yourself. It’s also a great starting place for making sure your amazing business idea is really viable.
What to include in your business Lean Plan
When you’re writing your Lean Plan, channel Twitter and try and keep each business plan section as short as possible:
- Value proposition: One sentence that describes the value you provide to your customers. If you were composing a tweet to tell people about your business, what would you say? With only 140 characters, describe what you do and what makes you unique. Your goal is to communicate the value you are providing to your customers in a way that they will understand.
- Market need: What problem does your business solve for your customers? If you aren’t solving a problem for your customers, you are going to have a hard time building your business. If you’re not sure, try talking to your potential customers and ask them what they like about your products or services. Why do they choose you over other alternatives?
- Your solution: How do you solve your customer’s problem? What products and services are you offering? Describe your product or service and why it’s better than the alternatives. Essentially, if someone asked you what you sell, what would your answer be?
- Competition: What products and services do your customers choose today instead of yours? How are you different? What makes your business and products better than the alternatives that are out there?
- Target market: Who is your ideal customer? Describe your ideal customer. Who are they? Be as specific as possible—age, gender, shopping habits, and so on. If you target different types of people, create market segments for each group.
- Sales and marketing: How do you market your products and services to your customers? What are your sales channels, or the places where you will sell your products? If you’re selling online, your online store is a sales channel. If you also have a physical store, that’s another sales channel. What will you do to market your business? If you plan on buying advertising, list the types of advertising you plan on doing here. Remember, different target markets might need different types of marketing activities to get your product in front of them.
- Budget and sales goals: How much do you think you will sell and how much is it going to cost you to make your product or deliver your service? What other key expenses will you have when your business is up and running? What sales goals do you need to reach for your business to be a success? Don’t sweat the details to start and just think in broad strokes to get a rough idea of how your business will work financially. You can refine the details later.
- Milestones: What have you achieved so far and what are your major goals for the next few months or years? This will help you stay on track and meet your goals. Make sure to assign milestones to people on your team so you have real responsibility and accountability.
- Team: Why are you and your business partners the right people to make your company successful? Even if you’re starting out with just you, write a few quick bullets about why you’re the right person to run this business. If you need to hire key people in the future, list those positions as well, even if you don’t know who specifically will fill those positions right now.
- Partners and resources: Do you need to work with other companies or organizations to make your company a success?
- Funding needs: This is optional; if you need to raise money for your business, how much do you need and what will you use it for? Even if you’re starting your business with your own savings or using credit card debt, it’s a good idea to plan on how you will use the funds until you start making sales.
Start with your Lean Plan—save the detailed business plan document for later
As you think about each of the areas above, don’t think “business plan.” Instead, imagine that you are having a conversation with someone at a cocktail party and you’re explaining your business to them in simple terms.
It’s much better to approach this as though you’re “pitching your business.” After all, the idea of pitch first, plan second is a best practice in business and is a much faster and more effective path to success than the traditional business plan.
Here’s an example of a Lean Plan I built in 27 minutes:
I’ve always wanted to own a bike shop, so here’s a Lean Plan that I built in 27 minutes, well short of one hour. As you can see, a Lean Plan doesn’t have to be complicated, and I still had time left over to do another one and try another business idea on for size.
I admit, I cheated a little bit and used LivePlan to create this Lean Plan which made the process easier, but you can create your own Lean Plan just as easily using our free template or just by writing down your notes for each business plan section in a document.
The key is to remember to keep each business plan element brief. Don’t add more than is necessary.
If you’re ready to start working on your own Lean Plan, download our free template and get started right away. Use markers or sticky notes to jot down your ideas quickly. If you want an online version that you can share with business partners, give LivePlan a try.
And, if you need a more traditional business plan, you can download our free template or browse through over 500 complete business plans. If you decide to leave it up to the pros, try LivePlan’s business plan consulting—you’ll get an MBA-written, long-form business plan in five business days that will be perfect for bank loans and investors.
Do you think you can use this format to plan your business faster and more efficiently? Share your thoughts with me on Twitter @noahparsons and feel free to ask questions, too. I’ll make sure to answer them as they come up!