A Simpler Plan for Start-ups

Chapter 4: Starting a Business - Page 4.8

A Simpler Plan for Start-ups

Don't let me, this book, business-planning software, or any other source force you into doing more of a business plan than you need. A plan can help you move forward, make decisions, and make your business successful. Not every plan is the same, not every business needs the same level of detail.

For a simple example, imagine a woman making jewelry at home and selling it at a local craft market on the weekend. A business plan could give her a chance to step back from the normal flow and look at ways to develop and improve the business. The planning process should help her understand her business. It should help her define what she wants from the business, understand what her customers want, and decide how to optimize her business on her own terms. She might benefit from developing a less detailed sales and expense forecast, maybe even a profit and loss, so she can plan how to use and develop her resources. She might not need to create detailed cash flow, balance sheet, and business ratios. A simple plan may be just what she needs to get going.

For an example of the very early stages of a plan, review the elements of starting a business plan in the section Fundamentals: Initial Assessment. This first stage of a plan focuses only on a few starter elements. The Mission Statement, Keys to Success, Market Analysis, and Break-even Analysis give you a critical head start toward understanding your business.

However, not all start-ups are that simple. Many of them need product development, packaging, retail fittings and signage, office equipment, websites, and sometimes months or even years of payroll before the sales start. Unless you're wealthy enough to finance these expenditures on your own, then you'll need to deal with bank loans or investors or both; and for that you'll need a more extensive business plan. Start-up company or not, the plan has to meet expectations.

One suggestion for getting started is to develop your plan in stages. A few key text topics might be enough to discuss the plan with potential partners and team members, as a first phase. You may then want to add a basic sales and expense forecast, leading to profit and loss, as the next phase. Adding business numbers helps you predict business flow and match spending to income.

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