How to write a business plan?
In my experience, with difficulty. It’s not an easy process but it’s surprisingly enjoyable at the same time. Even if your business doesn’t take off or even start, just by writing the plan I think one can learn a lot about the core elements one has to manage and think about on an ongoing basis. Here are some findings:…
A business plan can be as basic or as complex as you like. I am a fan of simplicity rather than complex models. If one can’t explain easily what you’re up to to others and they can’t get it, no one else will. Having said that, the plan itself has to cover some core elements which most importantly you’ll need. Also, it may transpire that investors may need too.
I started with an executive summary. The first sentence should capture everything about your business. A few words and all lament should be encapsulated (what do you, why you’re different, your goal, your customer proposition, your core brand). This took me ages and is, I think, very very difficult. Nonetheless, if you nail this then you’ll always have an anchor of what you are building.
I then had various elements, all of which are essential.
Business Summary – what you are going to do, why,
Market Overview – which market you’re operating in and importantly the size of the opportunity
Competitive Landscape – this should show the main players and gaps which you can exploit
The Plan – how you’re going to do what you say you’re going to do
Financial Projection(s) – Usually there are two or three projections: Probable, Worst and Best including returns on initial capital investment.
The Team – Who’s who, where are your strengths but also, who do yo need?
AOB / Risk Disclosure
If you have more to add then add an appendix. I always tried to think about what I’d like to see if I was to invest whilst also considering how long it takes to digest. You’re not writing a novel.
I found I re-wrote the plan about 5 or 6 times before i was happy (I don’t mean re-writing a bit, i mean the entire thing). I also found the financial projections opened up more questions and challenged me to find solutions. The most important lessons was to be pragmatic. When I sought advice from others they’d invariably challenge me and pick holes in it. This can be hard to take but it is an essential step. It’s always better to have more eyes and opinions before you begin.
I also found some friends / mentors gave me advice, advice I should have taken but did not. More on that in future.
Having said all of the above I also think it’s a very satisfying and enjoyable process. Good luck!