Business Plan for Startup Business

Image by Alex Osterwalder via Flickr

We’re officially 3 weeks into the New Year everyone and if this is the year you’ve decided to hang out your shingle and start your own business, let’s really start this year off right by talking about your business plan.

Many people are scared off by the very words, “business plan” but rest assured there’s nothing to be scared of. The reason most people dread the “BP” is because they’ve only ever heard of it in conjunction with presenting major calculations and tight budgets and financial forecasts and in depth profiles etc. But let me tell you there are many types of business plans and they need not be scary. But you did need to have one.

So let me put your mind at ease. You see all a business plan needs to consist of is a narrative and several simply written pages on how you plan to manage the business, who will help you run the business and perform the distribution as well as your location, how you plan to make money, and who your target audience is.

When most people go to put together a business plan they are used to the general template variety where the narrative is the body of the business plan and contains over 150 questions divided into several sections. These templates can allow you to work through the sections in any order you like, except for the Executive Summary which should be done last. You can skip any questions that do not apply to your type of business. When you are through writing your first draft, you will have a collection of small essays on the various topics of the business plan. Then you will want to edit them into a smooth flowing narrative.

That’s the business plan that people dread and wake up screaming about. But let’s talk about the real purpose of creating a business plan.

The real value of doing a business plan is not having the finished product in hand; rather, the value lies in the process of research and thinking about your business in a systematic way. The act of planning helps you to think things through thoroughly, study and research when you are not sure of the facts, and look at your ideas critically. For some it takes a lot of time to create a business plan for others it’s simple. Doing one does help to avoid costly, perhaps disastrous, mistakes later.

When it comes to putting a business plan together, you simply need to have an idea of what your business is; who needs the solutions you have to offer; how you are going to market to them; how they’ll get their product or service; how you’ll collect your payments and who will help you carry out these things. In the beginning you can create a simple business plan using a binder some tabs and 3-hole binder paper. As your business grows you review your business plan to see if you are still on track or if your needs have changed it will help you modify your plan to keep your business growing.

I should also mention that where you hear about those in depth financials section only comes into play when you are looking financing from institutions or investors. Even within apply for funding from these sources the types of business plans they require are put together differently as banks have a completely different focus than an angel investor. Banks and other financial institutions are more concerned with your pricing model, your target audience and your ability to collect payments from them in order to pay back the loan from the institution. Angel investors are more concerned with whether your company is capable of long term growth so they own a part of an innovative business venture. They aren’t as concerned with the repayment of the loan as they are with your company’s expansion potential and the growth of the industry your operate in.

It typically takes several weeks to complete a good plan. Most of that time is spent in research and re-thinking your ideas and assumptions.  But then, that is the value of the process. So make time to do the job properly. Those who do, never regret the effort. If you would like to learn an easy way to put your first business plan together without the stress click here.

Welcome back readers, I wish everyone a Happy and prosperous New Year

Dr. Ande,
Creator of: The 30 Hour Business Plan
Author of, 65 Tips for Affiliate Marketing Success
Host of, Dr. Ande’s Marketing Radio & Biz Talk with Dr. Ande