Welcome to day one of Leeward Business Advisors’ 12 Days of Starting a Business. We’re going through all the aspects leading up to starting a business! Follow along here on Medium and watch our Twitter for updates!
So, we’re not going to.
Instead, we would like to highlight why we think you should invest the effort into making a quality business plan.
Benefits of a Business Plan
· You will have a clear statement of your business’s mission and vision. Having a clear mission from the beginning will help with decision making. If every decision isn’t directly linked to the business’s mission, then why is it being made? It’s almost like a map to steer your business out of trouble and keep you on track.
· It can help you secure funding. This is often the purpose of many business plans- if they are crafted correctly, they can be presented to potential investors to secure capital investments.
· A business plan can help you create new business alliances. Business partnerships can help grow both businesses and the best way to secure one is by communicating on common goals.
Business plans aimed at investors out in Silicon Valley might be a little more laid back than those intended to reach Wall Street investors. It’s extremely important to write to your audience or you might be slightly embarrassed, not get funding, and hurt your brand.
Internal vs. External
An internal plan is usually more bare bones. It is frequently full of bullets and lists creating milestones, metrics and projections. It doesn’t need to be extravagantly worded if it is just for internal use.
An external plan needs more detail. In addition to lists, this needs summaries, descriptions, and explanations. Outsiders will want to see marketing analysis, elaborate marketing and product plans, and management team backgrounds. Really anything an outsider wouldn’t automatically know about your organization.
Business plans can take many different forms for different purposes.
The Lean Business Plan
This is a more efficient version of the standard business plan. This is good for an internal plan because it doesn’t include the summaries, descriptions, and background details owners and employees already know. A lean business plan creates a strategy along with execution specifics. It also includes essential numbers such as sales forecasts, spending budgets, and cash flow projections.
The Standard Business Plan
A standard business plan is usually created to fill the need of a business plan event, such as a presentation to a bank, a prospective investor, vendor, ally, partner, or employee. A lean business plan can be used as a draft for a standard business plan, which descriptions, detailed analysis, and financial projections are included.
The One-Page Business Plan
Also known as a business pitch, the one-page business plan includes highlights and only offers a high level overview of the organization. This can be useful as a quick summary for a customer, bank, partner, or employee.
A feasibility plan is used to validate a product or solution for a new market. It is usually focused on whether a product will work in a market. This can sometimes involve getting a product or service onto a crowdfunding site to gauge interest. Other times, feasibility plans are used to receive funding from grants.
There are tons of tutorials online for writing a business plan, but it is still easy to find yourself stuck in a rut. The US Small Business Administration has many local centers throughout the country looking to help small businesses and aspiring entrepreneurs. They provide plenty of free business consulting and low-cost training services, including business plan help.
Moral of the Story
A business plan isn’t some magical oracle that will guide your business to a billion-dollar evaluation, but it will provide value beyond just the launching your organization. The moral of this blog post is: Give your business plan a purpose. If you’re investing tons of effort, be smart about it.
At Leeward, we review our business plan about once every 18 months, and document the changes that were made. We use this exercise to learn about our organization, roles within the company, and our customers. Take this document seriously, and (even if writing isn’t your strong suite) be disciplined enough to update it. Your business plan is your business’s resume and your business is constantly looking to get hired.
Come back tomorrow to learn about choosing a location for your business!
About Leeward Business Advisors
Leeward Business Advisors is a Wisconsin-based corporation that provides business strategy planning, business improvement implementation, and full IT operational support. They offer world class Cloud Computing services, Cloud brokerage, Managed IT services, and a full US based Support Service Desk (called Quick Answers). Michael Polzin, CEO has 20+ years of enterprise business and technology experience gained while working at Allstate Insurance and Microsoft Corporation. Jason Klein, CTO has 15+ years delivering effective and efficient technology to Midwest companies.