A successful business plan encapsulates great new ideas and growth plans that the business owner or partners want to bring to fruition. However, many businesses stumble on this most basic element. Alan Manly provides a 12 step plan that will help you avoid doing the same.
Whether you’re an entrepreneur looking to start up your own business or a practice principal with your own established business that you’re wanting to grow, often what separates business success and failure is the ability to clearly articulate and document your ideas into a business plan.
How long should a business plan be?
While there is no fixed rule on how long a business plan should be, a good starting point is to look at how much time is spent verbalising an idea.
Given that most words are two to three syllables long, the average person speaks approximately 100 – 130 words per minute. Talking for say 15 minutes – assuming the business entrepreneur dominates the conversation in that time – would equate to the delivery of approximately 1,500 words.
As an entrepreneur or business owner sharpens their spiel – or ‘elevator pitch’ – about their great new idea or business model, a reasonably refined concept and opportunity will emerge.
However, don’t be fooled into thinking that’s as far as it goes.
People’s responses often come in the familiar form of “sounds like you have thought it out” or a casual, “I get the picture”. These can give entrepreneurs and practice principals a false sense of comfort that their idea has been understood and accepted by their audience.
The unspoken challenge contained in such comments is this: Do you have the discipline to actually ‘walk the walk’ and draft a business plan encompassing all the various factors? After all, every outing has used approximately 1,500 words – and not necessarily the same words each time.
A picture tells a thousand words
This famous phrase emerged in the U.S. in the early part of the 20th century. Its introduction is widely attributed to Frederick R. Barnard who, in an editorial, commended the effectiveness of graphics in advertising under the heading ‘One look is worth a thousand words’.
Consider this phrase in the context of a business plan.
A business plan is effectively a snapshot of a new idea and how it can reasonably be brought to market. And so, for any prospective entrepreneur or business owner, a blank sheet of paper or blank Word doc can be a terrifying thing!
Every word used should contribute towards painting the big picture, while adding colour and perspective to the grey areas.
12 steps to a successful business plan
A business plan can be any collection of random words. What makes for a successful business plan is a document that clearly articulates the business concept, route to market, unique selling points, operational requirements, resources, financial costings, risks and opportunities.
It provides clarity to an otherwise blurry image for anyone who sees it – whether they be prospective investors, lenders, board members, directors or staff. And, perhaps most crucially, the business owner themselves.
Consider this step-by-step approach to creating a business plan that’s worthy of the name:
- Write it down
While talking endlessly about your new idea is great, the next step is walking the walk.
There are so many things happening at once when launching any new business venture or growing an established business, making it easy to forget even crucial details. So, put your idea down in writing, both for the benefit of informing key stakeholders and keeping yourself focused.
- Find a template that works
Don’t make things harder on yourself than they need to be. Creating a business plan can be a huge time drain. Instead, find a template for a business plan: others have done the hard work for you, allowing you to concentrate on filling in the blanks.
There’s really no need to spend hours searching for the ‘perfect one’ – they all look the same when blank. Be decisive: choose one and that’s step two done.
- Read the template
That’s right – don’t race to fill in all the sections as fast as you can; this isn’t a high school exam!
Read the template and see what inputs it demands. That should take, say, 15 minutes. Now, jot down your ideas into any section that looks about right. Don’t worry if they’re wrong at this stage – things can always be edited and changed later.
- Stay focused
Keep going with jotting down your ideas until you’re tired. Then stop and do something else. Don’t waste your time and energy if your attention is no longer focused on the task at hand. Come back to it later with renewed focus.
- Elaborate
By now, you’re probably suffering from a racing mind. There are so many dot points that all need expanding. So, do it! Flesh out those points with more detail. Keep going until step 4 comes into play again.
- Read over your work
Read through all the points that you’ve written. You probably have the equivalent of two business plans!
Now, reread them and see how the points can be refined for a less-informed audience. Acronyms and buzzwords will need expanding on and explaining.
The goal is to not only articulate your plan but also to take key stakeholders with you on a journey of interest and possible investment opportunity, such as equity ownership.
- Put it out there
Summoning all the courage you can muster, share your work. Preferably with a business associate, instead of family members – you’re after constructive criticism and useful feedback.
At this stage, there’s nothing wrong with titling the document as an ‘initial draft’ or a similar protective title, because that’s precisely what it is.
- Review the feedback
Review what your first reader has said. That will probably be the nicest review you ever get. The real test is when you offer your business plan to key stakeholders or business partners.
- Compare business plans
Find a sample of a completed business plan on Google. Read it as if you were being asked to invest in a stranger’s great new idea or business growth opportunity.
You’ll soon see what draws you into their concept and any questions you’re left with – both of which can be applied to your own business plan.
- Take a break
Being too involved with your business plan can cloud your perspective. So, take a break, park your business plan aside and review it again after a few days.
Continue reworking it in preparation for the next ‘walking the walk’ test, which in the case of a business start-up, is giving the business plan to an accountant. The cost of this accounting advice is irrelevant. It will likely be the cheapest expense on your journey but deliver your greatest return on investment.
- Go back to step 8 and repeat
You now have a lot of insightful and qualified feedback on your business plan. Use it to further refine your document and fill in any remaining knowledge gaps.
- Share it with your family and trusted associates
These are the biggest risk-takers in any business venture that is starting up! Relatives and close, trusted associates are the ones who are most likely to invest in your business or become your first clients – or both.
If your family and colleagues can buy into the ideas outlined within your business plan, whether it’s about starting up a new business or growing your existing business, then it’s time to put things into action.
Good luck!
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Alan Manly is an Australian entrepreneur, company director and the author of The Unlikely Entrepreneur. He founded Group Colleges Australia – which incorporates a Registered Training Organisation and an Independent Higher Education Provider being Universal Business School Sydney that offers Bachelors in Accounting and Business along with a Masters in Business Administration.
