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A successful business doesn’t just happen by accident. Even if you come up with a brilliant idea or you practically fall into a money-making opportunity, you’re going to need a plan if you want to maintain ongoing success. But before we get into how to create a business plan, you might be wondering if need one at all.
Yes, You Need a Business Plan
There are those who say business plans are antiquated wastes of time. While it’s true that you can put too much time into a business plan and/or make an unrealistic business plan that won’t help you at all, any business can benefit from a properly executed business plan.
In fact, formal plans dramatically increase your odds of success – double the odds for startups and at least 30-50 percent greater odds for businesses that have made it beyond the startup phase.
Additionally, a solo entrepreneur, freelancer or independent is two-to-three times more likely to start their business in the first place if they have first developed a plan.
When is the WORST Time to Develop a Plan
There is no bad time to develop a plan, but the best time is before you start your business.
The worst time is after a commercial lender, potential investor or other stakeholder asks for it. If you need or want access to capital, you will be asked for a plan. Even a quick, 1st draft plan is far better than no formal plan at all. Your pitch / presentation will be much better thought out, professional and polished – and first impressions are critical.
So how exactly do you create one? It’s not as complicated as you might think.
How to Create a Plan
There is a difference between a Strategic Plan and a Business Plan. They are related but serve different purposes. The Strategic Plan is designed to close the gap between your business Vision and today’s reality – over time. The Business Plan defines how you will manage the business this fiscal year (or other pre-defined financial cycle/period).
Start with the Strategic Plan. It represents an over-arching approach and includes your strategic goals, objectives, and initiatives. Once you’ve defined your vision, mission and purpose, define your long term goals.
Goals are big lofty things that in and of themselves are not measurable. A recommended approach is to develop value-based goals. Start with Corporate Social Responsibility goals, then Employee goals, followed by Customer goals and, ultimately, Profitability goals. Once your goals are defined, identifying your measurable objectives and strategic initiatives designed to achieve them is a much simpler task.
Remember, the Strategic Plan is longer term, so as it develops into a solid plan, begin building your Business Plan. Start with your Product, Sales & Marketing plans within the Business Plan because it forms the foundation for everything else that you’ll include – like Operational, Staffing & Recruiting, and Financial plans.
When it comes to these initial plans, keep it flexible. Focus on brevity and getting to the point. Your Strategic and Business Plans should be simple and actionable as opposed to lengthy novels.
Want a little more structure and guidance for your business planning process? Check out the book Business is ART. It describes a process and templates to follow.
But when you are ready to get serious about your business, join the Plan Canvas community and begin working with tools and people that can help turn your vision into reality.