So, you’ve been asked to write a business plan. It’s likely that your mind is filling with images of long documents, bad memories of writing term papers, and worries about doing market research and creating financial forecasts.
Take a deep breath.
It doesn’t have to be that way. Today, I’m going to walk you through an easier way to get your business plan started, and show you how to develop a winning strategy.
Start with why you’re writing a business plan
But first, let’s talk about why you’re writing a business plan.
There are a lot of reasons why writing a business plan is important. Most businesses start the planning process because they are applying for a loan or seeking funding from investors.
But, beyond needing to develop a plan that will impress the bank or your investors, you want to build a solid company. You want to develop a sound strategy that will help your business grow and be successful.
Unfortunately, while traditional business plans will help you develop strategy, they have several drawbacks.
Traditional business plans take too long to write, they’re rarely updated, and they are time-consuming to read.
Now, there may be a point in your business career that you will need to deliver a formal business plan to a bank, investors, or other business partners. But, until that point, I recommend that you start your planning with a simpler process—a Lean Plan—that will help you develop your business strategy.
Building a Lean Plan takes less than 20 minutes. You can even build several of them in an afternoon to try out different business ideas.
A Lean Plan forces you to distill your ideas for your business into the core of your strategy. As planning expert Tim Berry says, “a good strategy is about what you’re not doing.”
And, once you have nailed down your business strategy, you can expand on it with a longer business plan document that fleshes out the details of your plan.
What to include in your Lean Plan:
Your Lean Plan is a very high-level overview of your business. Each section should only be a few bullet points, so you should be able to complete an initial draft of your plan in 20 minutes or less.
1. Your identity
What sets your business apart from others? What’s your focus? For example, a bike shop’s identity might be, “High quality biking gear for families and regular people, not just for gearheads.” With this identity, this bike shop has focus. It describes who they are and what they are trying to do. Ideally, you should be able to describe your identity in one or two short sentences.
2. The problem you are solving
How are you helping your customers? What problem will they go to you to solve? Don’t think that your business doesn’t solve a problem; for example, a new restaurant would fill a need for a particular type of cuisine or a certain atmosphere that is not currently available in a certain neighborhood.
3. Your solution to the problem
How does your business solve a customer’s problem? What is your product or service? Make sure your product or service is addressing your customer’s needs.
4. Your customer
Who is your ideal customer? A great exercise is to create a buyer persona, but you can just jot down some notes at this stage about who your customer is. Focus on a specific type of customer or certain groups. Focusing on “everyone” is not a sound business strategy.