With a basic understanding of tactics we have finished strategy and now we move into the business plan where everything you’ve thought about so far provides you with most of the information you need.
But not everything.
When I first started thinking about a business plan I reached out to the local Small Business Administration’s SBDC (Small Business Development Center) in nearby Tampa, Florida.
At my first appointment with a volunteer consultant I was confronted with the SBA Business Model Canvas, an excellent tool, actually. I’m embarrassed (as I was then) to say I had no answers to the most critical questions. I begged for time to think and supplied the answers by email a few days later.
The consultant was confused. My idea of a business plan didn’t fit the traditional model promoted by the SBA. We exchanged emails, the last of which told me that the consultant had presented my responses to her team and it was decided among them that my business did not “qualify” for SBA support. I asked why.
I received no answer.
I am guessing it had something to do with the SSP business model. A business built around profit-sharing just did not compute. Much less an organizational structure that had no bosses and people owned their own work.
Sad. A great opportunity was lost. A conversation between a traditionalist and an innovator would have been educational for both the consultant and the advisee.
But I was a misfit!
I tell you this story because you may not get much help from consultants or agencies stuck in the conformity of capitalism.
Nevertheless, their tools are helpful. They generally ask all the right questions, even though they expect the wrong answers. I have attached a few examples including the SBA Business Model Canvas.
What a Business Plan Is
In the simplest form a business plan is a roadmap for achieving your goals, objectives, strategies and tactics.
You might assume, therefore, that a business plan is to be a long, in-depth document containing everything. Not any more.
While there are detailed benefits from developing a business plan, only the key points go in the plan itself.
Bplans, owned by Palo Alto Software Inc, writes, “At its heart, a business plan is just a plan for how your business is going to work, and how you’re going to make it succeed.”
I’ve included in this class a video at the beginning and an article published by Bplan at the end as free resources to help entrepreneurs start and run better businesses.
Although forms are useful for white boarding, the final plan is usually a tightly written narrative. You can use it as a guide for performance or a document to present to potential investors of either financial and intellectual capital.
It is a living document to be kept up-to-date for presentation to inside and outside investors and team members.
Business Plan Content
A formal business plan should contain:
- An executive summary
- An overview
- Information about your products or services
- A list of your knowledge and experience in the field
- Explain your DNA and that of your company
- Share your goals and objectives
- Describe your informal startup team
- Outline your DIY marketing plan
- Include a separate financial plan
- End with an appendix
We will deal with the financial plan in the next essay.
A business plan is a narrative document, not a chart or bullets. It must be concise and establish your credibility, both for yourself and for others.
My recommendation is that you publish your business plan in Microsoft Word. If you don’t have that capability, then you need to engage someone who can.
Leave the Overview and Summary for Last
I would write the Overview and the Executive Summary after I had covered the rest of the topics including the financial plan. And I would write the Executive Summary after the Overview.
First you write the whole story. Then boil it down to an Overview. Then reduce it even further for the Executive Summary.
Your target isn’t in an elevator, so it’s not an elevator speech. But he or she is likely busy with no time to waste.
Although it’s your personal guide, the business plan is often used as a matter-of-fact sales pitch to attract capital investors or lenders of both financial and human capital. Remember the six capitals!
As in all writing, you need to quickly grab interest, expand the overview and then move into the details of the proposal.
Therefore, the best way to craft the business plan is backward — big picture first, little picture, then the grabber. Then you shuffle the deck with the grabber (executive summary) on top.
Answer Questions Before They’re Asked
Skipping over the summary and overview, let’s start writing about your products and/or services.
Tell your reader what you do.
Include as much detail as necessary, but keep it short. Even when you’re writing long you need to write tight. As I am doing right now. This is like making a complex salad at the salad bar. Even though you limit each ingredients, you can end up with too much in the bowl before the main course.
Edit it down.
Even then, everyone needs an editor. I’m a pro and I’m my worst editor. If you know a trained journalist or an English teacher, ask them for a favor.
Share Your Accomplishments.
Then you need to share your knowledge and experience in your field. Summarize it but expand on the highlights, education, accomplishments, awards and citations. If you’ve become certified as an indie entrepreneur, say so.
Explain Your DNA and That of Your Company
Describe the passion you have for your work and tell why you are a socially responsible, self-managed, profit-sharing business. You are dedicated to making life and work better for the sake of yourself and your family, your friends and neighbors, your community and your country.
Share Your Goals and Objectives
If you are a startup, reveal your intention to start small and grow bigger and how. If you are scaling up, explain why and how.
Explain your advantages under the socially responsible, self-managed, profit-sharing business model and your intent to keep profits circulating locally as a means of improving the economic well-being of the your team, your community and its citizens.
Describe Your Team
You are not a solopreneur. You have support from a number of people, so let it be known — family, volunteers, professionals, contractors, and perhaps (sooner or later) other indie entrepreneurs. Make it known that you expect to grow using local indie capitalists who will own their own jobs and receive compensation entirely through profit sharing.
Outline Your DIY Marketing Plan
Admit you will not have a full-fledged marketing budget at startup or scale up but you will use a combination of personal communication, online networks and word-of-mouth to promote your business. If you already have followers, describe them. Emphasize that you will use powerful DIY tools in lieu of paid advertising.
Above all, your alternative business model will be an interesting story for the local press. Might even go viral online.
Your Financial Plan
Although we privately emphasize that financial capital is not the most important capital we require, investors will need to know just how much capital (remember the six capitals) you will need to assure success and longevity.
Your financial plan will be about more than money. You will need to explain how profit-sharing can be exchanged for payroll and the positive effect it will have on how much financial capital you need. But all the capitals will be in play.
Appendix: Supporting Material
Provide a list of articles and videos that support your plan. The best example of the SSP Business model can be found on the COWORK Entrepreneurs page. Print it out and attach it to your business model explaining that you are following the guidelines of COWORK Entrepreneurs even though you are not yet a franchisee.
Select other articles and videos from NotMyEconomics that also support your plan. A few examples are attached to this class.
Back to the Beginning
Now that you have all the elements drafted, you can go back to the Overview and Executive Summary. See if you can write an Overview that condenses all you’ve written into 200 or 300 words. Try again. And again. Remember, you are invading a busy mind.
Last but now first, boil your Executive Summary down to just 60 words. If you can’t tell it all, pick the points that are likely to be of greatest interest for your target. Points that may propel the target into the Overview and beyond.
Get Edits and Opinions
Once again, I encourage you to find a qualified editor.
Then present the plan to people you know and trust to get their opinions. If the pitch gets a generally good review, leave it alone. There will be variations. More likely you will get feedback (good and bad) that needs to be considered before you publish the final draft.
Please move on to the next essay
Financials Made Simpler