Email this article to a friend

 

Chapter 2: Pick Your Plan

Make the contents of your plan match your purpose. Don't accept a standard outline just because it's there. There is a "classic" business plan that covers all the normal bases, and then there are strategic plans, operational plans, annual plans … all of them business plans that match their specific business purpose.

You can find dozens of books on the subject, about as many websites, two or three serious software products, and courses in hundreds of business schools, adult education and continuing education schools, and community colleges. Although there are many variations on the theme, a lot of it is standard.

What is a Business Plan?

A business plan is any plan that enables a business to look ahead, allocate resources, focus on key points, and prepare for problems and opportunities. Business existed long before computers, spreadsheets, and detailed projections. So did business plans.

Unfortunately, people think of business plans first for starting a new business or applying for business loans. They are also vital for running a business, whether or not the business needs new loans or new investments. Businesses need plans to optimize growth and development according to plans and priorities.

What is a Start-up Plan?

A simple start-up plan is a bare-bones plan that includes a summary, mission statement, keys to success, market analysis, and break-even analysis. This kind of plan is good for deciding whether or not to proceed with a full-blown plan, to tell if there is a business worth pursuing. However, it is not enough to run a business with. I'll talk more about this in Fundamentals: Initial Assessment.

The "Standard" Business Plan

A standard business plan, one that follows the advice of business experts and is prepared for formal presentation to outsiders such as a bank, investors, or corporate managers, includes an expected and customary set of elements. It should start with an executive summary. It should describe the company, its background and history, what it sells, its market, its strategy, its management team, and its financial projections.

Your plan depends on your specific situation. For example, if you're developing a plan for internal use only, not for sending out to banks or investors, you may not need to include all the background details that you and everyone in your company already knows. Description of the management team is very important for investors, while financial history is most important for banks. Make your plan match its business purpose.

 

Copyright © Timothy J. Berry, 2006. All rights reserved.