Do You Really Need a Business Plan?
Whenever someone searches the internet on how to start a business, or talks to their banker, accountant, SCORE, or other resources, they always seem to walk away with the same answer: “You need a business plan.” But do you really need one? The Answer is…not unless you want a loan or investment. Even then, your format and content depends on the outcome you desire.
How about a Business Strategy…
The words “business plan” seem to connote long hours, often in the middle of the night, where an entrepreneur is pounding away at the keyboard. But if you are not seeking a loan or investors, you might want to consider a more pointed option: an Executable Business Strategy.
An Executable Business Strategy (EBS) is a short form business plan designed to outline the strategies and tactics that the entrepreneur should employ to get the business going, or for existing businesses – your action plan. It doesn’t have to be convoluted or have loads of research, it just has to define the goals and the tactics and strategies to reach those goals. The typical EBS for our clients tends to be 4-7 pages long and more bullet points than paragraphs. The reality is that the business owner can quickly make adjustments and updates on an ongoing basis. The EBS becomes the roadmap for the business and not a document that sits in a binder gathering dust.
Existing businesses should update their EBS at least quarterly. This is a great time to have a staff meeting with your managers or advisors as well so that everyone is on the same page as to your action plan.
Here are the elements we have our clients write:
Summary of Defined Goals: Set these out in specifics. More than just revenue, think about profit margin, hiring, equipment purchases, growth pattern, and maybe even a time-released products and services schedule.
Timeline: Set out a timeline for how you want the business to look for the next year. Include all the milestones you think are necessary; include client acquisition figures, etc.
Product/Service: What is it you sell, why would someone want to buy it, what is the price you sell it, and how much does it cost you.
Differentiation: What differentiates your product or service from everyone else? Be VERY specific and diligent in finding differentiating factors. The things that set you apart are the reasons for people to buy from you instead of the others. Make these the cornerstone of your marketing and your elevator pitch
Target Market: Who will pay for your products or services. Be specific and have fun with it. Name your target sectors if you want. We have a client who performs residential solar panel installations. They call one type of client the “Judy Jetson,” the lady in the neighborhood that wants to have the latest everything in fashion and technology; and solar power just adds to her “wardrobe”. Another target is the “Granola,” the person that has to have solar power to go with their electric car, composting, and organic garden. Find your own way to define your market, it will make it easier for you to eliminate wasted time by focusing in on the people most likely to buy from you.
Competition: You need to have at least a basic understanding of your direct competition, their capabilities, and pricing. Knowing your place in the market will help you solidify your offerings. We will address a good “Competitive Analysis” in an upcoming blog post.
Staffing Needs: Whom do you have on board now? What roles and functions do they cover, and who will you need during this period until you evaluate your EBS again. Include yourself!
Overall Management: Describe your management team, what roles do they play, and how is the decision making tree defined. This is where you begin to think about delegation.
Pro Forma Projections: Take your operating projections out 12 months. Be realistic.
This should get you on your way to your EBS, now just apply it to your business and grow!
Bill Maltbie is the CEO and Founder of Attrieve Business Advising Centers. He is a serial entrepreneur and a recovering Chief Operating Officer. Attrieve assists owners of small and medium businesses to work ON their businesses and not IN their businesses. All of Attrieve’s current clients are experiencing growth and increased profit margins. firstname.lastname@example.org