The Anatomy of a Business Plan

Written business plans are as varied as the companies that compile them.
Some plans run almost 100 pages, whereas others barely fill a few sheets.
Some plans start with executive summaries, and others plunge right into
detailed descriptions of products and services. Some companies print their
business plans on paper, and some publish their plans exclusively on the
Web. Some plans include page after page of financial projections, and others
list only anticipated costs, expected revenues, and projected profits.

Every business plan is written for a different reason and to obtain a different
outcome. Still, some plans are better than others. The following information
helps you write a plan that will win high marks.

Identifying Target Audiences and Key Messages

Your business plan is the blueprint for how you plan to build a successful
enterprise. It’s a comprehensive document that covers a lot of territory and
addresses all sorts of issues. To help focus your efforts, consider which groups of people will have the greatest impact on your success. Those
groups will be the primary audiences for your business plan.

For example, if you need capital investment, investors will be your primary
audience. If you need to build strategic alliances, you want to address potential
business partners. You and your team are another key audience for the
plan, of course, because it will serve as your guide. Be sure to keep that fact
in mind as you fine-tune the messages you want to convey.

Buying into the value of business planning

The time you invest in your business plan will pay off many times over. Some
of the most obvious benefits you’ll gain from business planning include

✓ A clear statement of your business mission and vision
✓ A set of values that can help you steer your business through times of
trouble
✓ A blueprint you can use to focus your energy and keep your company on
track
✓ Benchmarks you can use to track your performance and make midcourse
corrections
✓ A clear-eyed analysis of your industry, including opportunities and
threats
✓ A portrait of your potential customers and their buying behaviors
✓ A rundown of your major competitors and your strategies for facing
them
✓ An honest assessment of your company’s strengths and weaknesses
✓ A road map and timetable for achieving your goals and objectives
✓ A description of the products and services you offer
✓ An explanation of your marketing strategies
✓ An analysis of your revenues, costs, and projected profits
✓ A description of your business model, or how you plan to make money
and stay in business
✓ An action plan that anticipates potential detours or hurdles you may
encounter
✓ A handbook for new employees describing who you are and what your
company is all about
✓ A résumé you can use to introduce your business to suppliers, vendors,
lenders, and others

Making a wish list for your business plan
Setting out your priorities in the form of a business-planning wish list can
help you focus your efforts. With a completed plan in hand, you can return to
this list to make sure that it achieves everything on your list of priorities.

Committing to the Business-Planning Process

With a thousand issues clamoring for the precious hours in your day, committing
time to plan your company’s future isn’t easy. But operating without
a plan is even harder — and even more time-consuming in the long run. We
can give you dozens of good reasons to plan.

Two steps can help you get started. The first is to define your business situation
and how a business plan can help you move your business from where
it is to where you want it to be. The second is to list the ways that a business
plan can heighten your company’s odds of success. The next two sections
lead the way.

Planning for a start-up

A start-up company begins with a new idea and high hopes. A business plan
helps these new ventures evaluate their new idea, potential market, and
competition. The critical questions that a business plan for a start-up must
address are

✓ Does this new venture have a good chance of getting off the ground?
✓ How much money will the business need to get up and running?
✓ Who are our customers, and what’s the best way to reach them?
✓ Who are our competitors, and what’s the best way to outrun them?
✓ Why will customers choose our new product or service instead of our
competitors’?

Planning to address changing conditions

Especially during rocky economic times, many existing businesses are trying
to retool themselves. The critical questions a business plan must address are
✓ What are the economic realities we face?
✓ How can we reshape the company and its products or services to compete
in the new economic environment?
✓ What steps do we need to take to reach the goal of achieving those
changes?

Planning to seize growth opportunity
Even successful companies can’t rest on their laurels. To remain successful,
they have to continue to compete. For many, that means recognizing and
seizing opportunities to grow their businesses. For companies charting a
strategy to grow, a business plan must address several key questions

✓ Where do the best opportunities for growth lie?
✓ Who are our competitors in this new market?
✓ How can we best compete to grab new market share?

Starting Your Planning Engine

The fact that you’re holding this book means the task of writing a business
plan has made it onto your to-do list. Now come the questions. What
exactly is business planning? What should it include? Where do you start the
process of writing your business plan?

Well, that’s exactly what this blog, is all about. It confirms your hunch that business planning is
essential — when you start your business and at every growth stage along
the way. Plus, it helps you think clearly about why you need a business plan,
whom your business plan is for, what key components you need to include,
and what kind of time frame is reasonable.