We all know that having a business plan is essential to a successful long-term venture. If you’ve never written a business plan before, it can be daunting, because the business world is riddled with so much jargon and ‘business speak’. As it turns out, we don't have to get an MBA to be able to write a great business plan, we can do it on just 1 sheet of paper.
The good news is that a business plan doesn’t have to be a huge manifesto or a massive clunky document. Some of the most successful ideas were written on a napkin…The main point, however, is to write them down. This is simply because humans are fundamentally visual creatures (we have some of the best eyes in the animal kingdom for good reason) and we also have terrible mid to long-term memory (what did you have for dinner last week Monday?).
Why do I need a business plan?
Starting a business is really, really hard. In fact, up to 70% of businesses fail within the first 5 years. Having a plan is crucial to navigate the obstacles that you’ll face along the way, and to hone your focus on the things that matter for your company. This is why you need a concise and practical plan that contains your entire modus operandi.
The benefits of having a concise business plan include:
Opportunities to uncover potential strategies for long term growth
A clear understanding of your resources and the people you need to help you
An overview of your business productivity
Clear operations and process movements
A road map that investors and partners can easily understand.
A business plan let's you see potential issues
In the early stages of business, you’re going to fail a lot. When something doesn’t work out or falls apart, you need to diagnose and prescribe a solution to the problem, quickly. A business plan is a great way to see all your processes in action and what you have in your tool kit to overcome set backs. It also orients you toward your ultimate long term goal of having a successful and operational business.
Sarah Blakely, founder of Spanx, is a self made billionaire, yes, that's with a ‘b’. She went from a door to door fax machine salesman to becoming one of the richest and most influential women in the world. Sarah pinpoints her success to an attitude that her father cultivated in her as a child. At the dinner table, he would ask her and her brother, “what did you both fail at this week?” They were expected to come up with an answer on the spot.
It became clear to Sarah at an early age, that if she wasn’t failing, she wasn’t trying hard enough. She also regularly practices embarrassing herself in public, like singing in a full elevator, just to prove to herself that she will do whatever it takes, in whatever situation, to make sure that she’ll succeed at the end of it.
Failure isn’t the problem, it’s when you don’t learn from failure — that’s the killer. Your business plan is the place to put new information, so you can reference, tweak and modify your plan as you push forward. Because, ideas are great, but processes are better
Don’t just have ideas, execute them
Have you ever found out about a new business, say: Uber, Spanx, Air BnB; and thought to yourself, “damn, I had that idea years ago, if only I had acted on it, I’d be stinking rich right now.” Well, ideas are cheap, we all have ideas and don’t act on them because we prioritise other things at the time. The spoils of a successful business always go to the person who takes action, makes the sacrifices and consistently executes toward their defined goals.
That’s why a simple business plan is so great; it puts your ideas and resources in a process oriented schema that allows you to take action in the direction of most value.
A business plan gives you utility
A business plan is meant to be used a lot. It’s not something that you create once and file away in some secret file cabinet. You’re meant to edit, tweak and scrap the things that you wrote in it 6 months ago, it’s the definition of planning.
Things to keep in mind when starting your business plan
The key to writing a simple and effective business plan is to use a scaffold. This helps you plan the most fundamental aspects that every business needs to have in place, in order to function well. Before you start, there’s some basic research that needs to be done.
You have to know your customers
Could you have a lengthy conversation or debate with someone around your customer’s needs, frustrations, challenges and desires? If you feel like you can’t answer these questions about your potential customers, don’t fret; get straight into some guerrilla tactics and go ask 10 people if they would buy your product or product idea. Really question them about why they would or wouldn’t buy it. This is a great practical starting point.
Know who your competitors are
It’s not fun to be blind sighted. One of the biggest blunders that major corporations make is not taking their competitors seriously. Think about Nokia, they had all the technology and capabilities to give us a great touch screen phone. Too bad they didn’t pay attention to what Apple was doing with the iPod touch — then, the iPhone came out. Nokia has lost their competitive advantage. Actually, they lost their whole market share. What about Netflix destroying Blockbuster? Here’s the salt in the wound; Netflix offered to sell their company to Blockbuster for $50 million in the year 2000, but the Blockbuster CEO said no!
What’s the solution you’re offering that solves a specific problem in the market?
Now that you know who your customers are, and you know what your competitors are offering; what’s the MVP (Minimum viable product) that you can offer to solve a specific problem in a way that differentiates you from your competitors. What’s 1 to 3 features of your product or service that solves this need? What are the benefits that your customers will receive from using your product? You can then choose to release your solution to the market or have a sample group of people test a ‘beta’ version. You definitely want to collect customer feedback through surveys and reports during this stage. This information really lets you know what areas you need to innovate and improve.
How are you getting paid?
Simply put, you want to make it as easy as possible for customers to pay you. There is a myriad of online platforms that you can use, depending on your business model: Stripe, Apple Pay, Google Wallet, We Pay, Paypal, Amazon Payments, Square, Authorize.Net. These are just some of the best online payment solutions. Find out what platforms best serve your business needs and start getting paid.
Using a Business Model Canvas
A popular tool is the 1-page Business Model Canvas. This is a scaffold that holds all the information to support your business model. It’s a plan that you can use, tweak and share. This is a tool that takes the airy fairy-ness out of business planning and gives you a simple dashboard to start taking action toward your important business goals. It’s been serving entrepreneurs and large corporations since it’s debut in 2004, and we know that it will serve you, too.