Writing a business plan doesn’t have to be a daunting process that takes weeks or months. As an entrepreneur, you don’t have that kind of time. Writing a plan just takes a little bit of preparation and a methodology that will guide you through the process, step-by-step.
That’s what we’ve set out to do here, in this article. It’s not just about learning what is in a business plan, but how to put the plan together so you can get your plan finished quickly.
Can you really write a business plan in a day?
Yes, it is really possible to write a business plan in one day. In fact, I’ve seen many people not only pull plans together but get businesses completely off the ground in a weekend during the always fun and energizing Startup Weekend events. If you have a good sense of the business you want to start or have a solid understanding of the business you’re already running, then writing a business plan in a day can certainly be done.
Before we get on to the methodology you’ll use to write a plan in a day, here are a few tips to keep in mind:
Know why you’re writing a plan and who it’s for
Business plans can come in many shapes and sizes. Who your audience is and what the purpose of the plan is will determine what sections you need to include and what you can skip.
For example, if you’re writing an internal business plan to figure out how you’re going to expand, you can skip all the sections about company history and team members. However, if you’re writing a plan for investors, they are going to want to know about the team behind the business.
There are no extra points for length
A general rule of thumb about business plans is the shorter the better. You want to write the absolute minimum. This isn’t a paper that you’re writing for school that has a minimum word count. A business plan is about communicating your ideas as simply and directly as possible.
Don’t be intimidated
It’s important to remember that the vast majority of business owners and entrepreneurs don’t have a business or accounting degree. They, just like you, have a good idea and the tenacity to turn that idea into a business. Writing a business plan doesn’t require any special knowledge or advanced degree. It just requires that you know your business.
6 steps to create a business plan in one day
With these tips in mind, here are the six steps you’ll need to take in order to successfully write your business plan in one day.
1. Conduct market research before you start writing
Possibly the most important part of your business plan is your market analysis section. This is where you describe who your customers are and why they need and want your product.
The reason this section is so important is that a business is nothing without customers. Understanding your customers is the key to a successful business and this step should not be overlooked.
If you already have a solid understanding of your customers, then writing this section of your business plan will be simple. You’ll want to describe who your ideal customers are, what their interests and needs are, and their key demographics (age, gender, economic position, job position, etc.). You may also want to look at the psychographics of your customers—a description of your customers’ attitudes and aspirations.
If you haven’t thought much about your customers yet, doing this work before writing your business plan will make the writing process significantly faster. Not only that but understanding your customers and their needs is the key to a successful business. When your product or service meets the needs of your customers, you have what the famous investor Marc Andreesen has called “product-market fit.”
This ensures that your customers become long-term customers, as repeat purchases are often the primary driver of business success.
2. Outline the sections of your business plan
Just like building a house, building a business plan requires that you lay down a solid foundation. You’ll want to start your day by creating an outline for your business plan so that you have a strong starting point for your plan and understand all the building blocks that you’re going to need to complete your plan.
A standard business plan includes the following sections:
- Executive Summary
- Products & Services Description
- Market Analysis
- Marketing & Sales Plan
- Organization & Management Team
- Financial Projections
Within each section, you can customize sub-sections to meet the needs of your business.
For example, if your business sells widgets that it buys from suppliers, it will be important to describe your supply chain in your Product Description chapter. If you sell your widgets in retail stores, it will be important to describe your distribution plans in your Sales Plan chapter. However, if you are planning a restaurant business, sections like supply chain and distribution won’t be important and you’ll have other key sections dedicated to location and marketing.
3. Look at some business plan examples
With your business plan outline set, the next step is to review some example business plans. This will give you an idea of the type of language that people use in business plans and inspire you.
Don’t plan on copying an example business plan. This is never a good idea because every business is unique. However, knowing what a finished business plan looks like is a very helpful part of the planning process.
4. Start with what you know
Now that you’ve done all of your prep, it’s time to start writing your business plan. The key is not to start at the beginning and work systematically from start to finish.
Instead, start with the sections that you know the best. For most people, describing their product or service is a great place to start. That’s likely the section you’ll know the most about. From there, move on to the next section you feel most comfortable with.
This method will help you get the ball rolling with the writing process and gets the simple work out of the way. That way you don’t get hung up early and discouraged by a more difficult section.
One tip, absolutely leave the executive summary for last. Because the executive summary is a summary of your entire plan, you’ll want to finish everything else before you summarize it.
5. Draft very simple financials
Financial forecasting can seem intimidating, but it doesn’t have to be. Start simple and add more detail as you go.
Start with a sales forecast
The best place to start is with your sales forecast. Make your best guesses about your future sales based on what you know and what you hope for. The trick to sales forecasting is to think about a “bottom-up” sales forecast. Make an estimate of how many prospective customers you think you can reach in a month and what percentage of those prospects will purchase from you. For more details on sales forecasting, check out this guide.
Outline your expenses
Next, move on to your expenses. Again, if you don’t know the exact numbers, that’s fine. Make your best guesses for expenses such as rent, insurance, payroll, marketing, etc. You can continue to refine your forecast as you learn more about your business and get more detailed figures. Read our guide on income statements for more details.
Understand your cash flow
From there, you’ll want to put together a cash flow forecast to ensure that you’ll always have enough cash on hand to run your business. This can be a bit more complicated, but you can save time by using business planning software. If your goal is to finish your plan in one day, software can cut hours of time out of the forecasting process. It will also ensure that you don’t have to worry about spreadsheets and custom formulas.
6. Have someone ready to review your plan
Working with a business partner can speed up the planning process significantly. Taking a “divide and conquer” approach will help you work through the planning process and make writing a plan in a day achievable.
But, if you don’t have a partner, find a friend or family member who’s willing to read your work as you go. Roping in someone to help you review your plan not only provides you with valuable feedback but also makes your commitment to writing real. Once you have someone else ready to work with you, it will be much harder to procrastinate or put off plan writing for another day. Just like it’s always easier to go to the gym with a friend, planning is always easier with a partner or helper.
Having someone review your plan will also help you catch inconsistencies and errors. Assuming you are writing your plan out of order, as advised, it can be easy to make mistakes as you skip back and forth. A helper who is reading your plan as you produce it will help you ensure that the plan is cohesive when it’s complete.
Start with a business plan that takes only an hour to write
If committing to a full day of plan writing seems like too much, start with a Lean Plan instead. A Lean Plan can be finished in as little as 30 minutes and is a great tool to explore business ideas and refine your business strategy.
In fact, most businesses are better off starting with a Lean Plan and then expanding to a full business plan as they refine their business concept and strategy.
You can learn more about creating a 30-minute, lean business plan and get started by downloading the template here.