Business plans

by Admin
Updated: June 17, 2018

The business plans necessary to run a business are different from those used for raising capital

Running a business without a plan is like driving a bus with your eyes shut: No-one will be impressed even if it doesn’t end in disaster.

Most business owners accept that they must have business plans but these are all too often collections of bland statements & naive financial projections that serve no purpose and are never used. They get printed out once, maybe nicely bound, put in a drawer and never looked at again, proving how useless they are.

In my opinion, there are two types of business plan that are actually useful and they have very different purposes. You may never need the second type but the first is always necessary:

Type 1 - The plan with no name

My Type 1 business plan is the working/operational plan.

Often referred to as an internal business plan, it is a detailed description of the goals of the business and the strategies required to achieve them.

It is a dynamic plan and must be continuously updated as you adapt to changing situations.

How to write one: You absolutely must write this yourself but don’t go reaching for a template - write it directly from what you know. This is a plan you are going to refer to every day and as such it must define the following exactly:

  • what you hope to achieve
  • where you are right now
  • how you’re going to get from here to there
  • a record of your progress

Write these things in note form. They’re for internal use, not for presentation, so they can stay in note form. The time to look at templates and other guides is after the first draft to see if you you’ve missed anything.

This information should not be shared outside of your top-level team and the people who are allowed annotate it should be restricted even further.

In the old days of paper, I would use a plain ring binder and I’d review it every day, retyping (myself) pages that had accumulated a lot of notes. I knew exactly what it was so I didn’t need to bother labeling it, hence: The plan with no name.

These days, I follow the same process but the doc is usually digital. Depending on your team, the rough & ready ring binder that can be seen and touched may still have a role to play.

Type 2 - The plan with one purpose

My Type 2 business plan is for outside investors.

Often referred to as the external or investment business plan it exists for the sole purpose of obtaining funding.

It is a fixed document and has a limited lifetime. It must be dated, printed and nicely presented.

How to write one: Don’t even think about writing this yourself.

This formal business plan must be in a format and be drawn-up by someone the target audience recognizes (you may need multiple versions but, of course, it must always be the same plan).

Get an all-in-one package: The person who writes your plan should have connections to those who will invest. You can expect their fee to be proportional to the amount raised.

More info

The SBA has a popular intro at Write your business plan and also a Business Plan Tool (requires registration).

Bplans.com has a popular intro and template with some honest advice - “Why NOT to use a business plan template” - which I respect.

Chron.com defines 6 Types of Business Plan (Start-up, Internal, Strategic, Feasibility, Operational and Growth) although I would say they could all be sections within my “Type 1” plan.

Jeremy Marsan on fitsmallbusiness.com describes 9 sections for a good business plan and is bold enough to include “Napkin” as an acceptable unformatted medium for a quick plan. Nice!

Internal links

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