Joe Strategy

One of the most dreadful parts of starting a business is writing the business plan. They can be incredibly boring, long-winded and often times end up collecting dust on your bookshelf.

Joe Strategy’s advice to small businesses can fix that! Welcome to Business Plans 101, the most basic and uncomplicated understanding of what’s good and bad about business plans that you will find.

What Does A Business Plan Do?

1. A business plan precisely defines your business, identifies your goals, and serves as your firm’s resume.
2. It provides specific and organized information about your company that informs the reader how wonderful you are.
3. It helps you allocate resources properly, handle unforeseen complications, and make good business decisions.
4. It is the roadmap of your strategy; identifying the actions needed to implement the strategic plan.
5. It provides the information necessary for others to evaluate your company’s strategy.
6. It is one of the strategic planning tools that can be used to measure the performance of the business and its managers.

How to Write a Business Plan?

Simply answer the following questions; in bullet format, with just enough detail and description for the information to be understood by someone who does not know your business; and you will have a business plan:

1. What are your company’s mission, vision and values?
2. Who are your customers, how will you reach them, and how do you know that your approach for reaching them will work?
3. What do your customers need and value, how do you know this, and how will you provide it to them?
4. What are the current trends in your industry and market?
5. Who are your competitors?
6. What differentiates your business from all the others in your industry? How will you create a Blue Ocean market for your company? *
7. What are your qualifications to accomplish your goals?
8. What will you do to make it easy for people to do business with you?
9. What are your assumptions for revenue, expenses and profit margin; and how do they compare to industry benchmarks?
10. How will you measure your progress financially, operationally and strategically?
11. What are frequently asked questions and their answers about your business and your plan?

Do’s and Don’ts

As you write your plan, keep in mind these “do’s and don’ts”.

DO:

1. Write a short Executive Summary that truly recaps the answers to the above questions.
2. Make sure you understand the audiences who will be reading your plan.
3. Make the description of mission, vision and values clear, concise and easy to communicate.
4. Keep it simple (stupid).
5. Use straight forward and professional language. Leave out the fluff.
6. Keep it as short as it can be while delivering a comprehensive understanding.
7. Make sure customer and marketplace research is documented and that your strategy is consistent with the findings.
8. Recognize why the competition is in business and why business is done the way it is.
9. Explain the logic and methodology utilized to create the projections.
10. Double the timeframe you think you need to execute your plan.
11. Use bullets and pictures.

DON’T:

1. Allow the Executive Summary to become as long as the plan itself. That is repetitious.
2. Forget that bankers, investors, employees and customers are all reading your plan with a different perspective.
3. Try to be Shakespeare.
4. Make it longwinded or all encompassing. If it takes forever to either write or read, then something is wrong and it becomes too much work for too little benefit.
5. Allow delusions of grandeur to turn the reader off.
6. Write a novel.
7. Second guess the customer and the marketplace. You could be going against an immovable force.
8. Underestimate the competition and the industry structure.
9. Leave the reader guessing on how you arrived at your numbers.
10. Forget that reality rarely goes according to plan.
11. Forget that you can put very detailed information into an appendix.

 * In their best-selling book, Blue Ocean Strategy, W. Chan Kim and Renee Mauborgne discuss Red Oceans and Blue Oceans as part of strategic planning best practices.

Red Oceans are market spaces in which a crowded market of competitors focus on fighting with each other. In red oceans, companies often invest in advancements that are only marginal advantages over the competition and therefore easily copied.

Blue Oceans are uncontested market spaces in which successful companies find ways to create demand in areas that are ripe for growth. These companies find ways to create value for customers that others are not providing. And at the same time, they look for activities to reduce or eliminate that are not valuable to customers in order to become a lower cost operation.