(Note: this article is an excerpt from The Plan-As-You-Go Business Plan, published by Entrepreneur Press, written by Tim Berry, and bundled with LivePlan. It is reproduced here with permission of the publisher.)
Think of your business plan as a matter of blocks, like interrelated 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 sales forecast, the mission statement , the keys to success, maybe a break-even analysis, or a SWOT, or how about the heart of your plan, as in the whole discussion of who needs your product or service and why and what it is? A sales forecast is a block, and so is an employee or personnel plan, as in laying out month by month how many people will be working in your company, and how much each of them will be paid.
The key here is that you don’t get bogged down on having a finished business plan before you do anything else. You’re planning as you go. You’ve heard the stories of people who spent months developing their plan, but never get started. So instead of that, think of the blocks. Choose where you want to start. Get going.
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 through 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 OK don’t apologize — business planning needs that, too. I was a literature major in college but I still like to start my business planning with a sales forecast. Then I’ll do some conceptual work, then go back to 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 part. I thought of this analogy when somebody I know and respect suggested that the heart of a business plan is the marketing plan, meaning its identity, positioning, differentiation, the sense of what business you’re in and why people buy from you. 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 OK too; that’s a block, you can jump in there.
- There are lots more blocks. The mantra. The vision. 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, and 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. You’ll have to review and revise regularly to keep your business going. 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 hold your course. That’s paradox, of course, and that’s why we (owners and managers) do it instead of computers.
(Additional note, for LivePlan users: your outline view makes it easy to jump around as suggested here. Tim)
Tim Berry is the founder and chairman of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry.
