A rant about business plans: When was the last time you looked at yours?

When was the last time you looked at your business plan? Last week? Last year? Last decade? The day before you officially opened for business?

In my experience, surprisingly few people write a business plan (I made exactly that mistake!); and those that do, write it and then let it grow dusty on the shelf, as if the plan was just a small and annoying step that needed to be checked off of the list. I’ve met many people who spent more time fretting over a new car purchase than the start of their business. They don’t mind pouring over vehicular statistics and comparing models of the car they’re going to drive (which will immediately depreciate as soon as they drive off the lot) but they’ll cringe at the thought of writing some ideas, strategies, and financials down to give a little proactive thought to an investment of their time, money and effort that should appreciate over the years. Heaven forbid that they do a little business planning now to figure out the trajectory of their company for the years to come!

I think part of the problem is the we we perceive business plans. They are often thought to be stuffy, formal documents. They are thought to overflow with buzzwords that would make any MBA drool. Their numbers are said to be nearly meaningless. In many ways, these documents need to be written at the worst possible time — usually the point when the aspiring entrepreneur feels the most passionate and energetic about their business and they just want to get out there and take action… they don’t want to get bogged down in research and details and buzzwords and proformas. Business plans are perceived to be soul-crushing documents that are purely optional and typically only written by the anal retentive and extremely cautious.

But good business plans aren’t like that. They shouldn’t be stuffy or stuffed with buzzwords. A good business plan doesn’t have to be arduous to create and highly formal in how it’s structured and written. A good business plan shouldn’t crush your eager-to-start spirit — it should stoke the coals of your imagination and motivation by sharpening your focus. (Mixed metaphor alert).

A good business plan is meant to be used, not stored on a shelf. A good business plan should be both strategic and tactical, and something that a business owner can refer to every single day. Yes, a business plan is a high level document that you might use for banks or investors but it should also contain your operational plan, your sales funnel (your marketing and sales plan), and contingencies for when things go horribly wrong. It should inspire and guide… EVERY TIME YOU LOOK AT IT.

Heck, don’t even bother getting a professional to write it (unless you are going to use it to help you find investors). Just sit down and do it yourself. Roll up your sleeves and dig in. Write your goals and then the steps you want to take to get there. Create financial statement projects and proformas that are useful for you. (Tip: Create 3 versions of each financial statement — a set of high projections, a set of medium projects, and a set of low projections). Research. Add information based on what you’ve seen so far (if you’ve been working in the industry already). Create a document that you can hand off to someone else while you go away for a year-long vacation and when you get back, they’ll have built the exact business you had dreamed of!

Starting and running a business is like going on a long journey — it’s best accomplished when you have a map that you can refer to, which will help you get to your destination.

Like a map for a long journey, it’s not something you should write once and put away. It’s something that you should leave open on the seat beside you while you drive. When you’re not sure where to go, you can consult your map. When you’re tempted to veer away and chase new ideas, you can be reminded of the original plan. When you are forced to take an unexpected detour, you can get back on track. THAT is the value of a business plan.

If you haven’t looked at your business plan in weeks, months, or years, go get it right now. (Do you know where it is?) Dust it off and look it. Is it practical? (Probably not since you haven’t looked at it in so long). So figure out what you can do to make it practical. My suggestions are:

  • Erase the buzzword-filled nonsense that doesn’t help anyone. Replace it with some unpolished ideas in raw form — specifically, big-picture goals, smaller-picture goals, and the actions you’ll take to get there.
  • Write about how you want your business to grow, what you plan to do to get it there, and what you’ll need to scale up along the way.
  • Create financial projections that actually mean something by doing a bit of research and writing 3 sets of financial statements, with high-priced assumptions, medium-priced assumptions, and low-priced assumptins.
  • Add an operational plan.
  • Add your sales funnel (a marketing plan and a sales plan).
  • Add in your document templates, logo variations, branding rules, operational checklists, etc.
  • List contingencies and plans to implement them if the need arises.

If you have never created a business plan, do it now. Here are a couple of good sites to start with. These sites contain a mix of information, step-by-step instructions, and even templates to get you started.

Go and make your business plan useful to you!

This easy 9-step business plan still works amazingly well

As new entrepreneurs start up, one of their first and most important questions is: “What should I sell and should I sell it?

Here’s a business model that continues to work. I’ve worked with many dozens of entrepreneurs who use this model; I have enjoyed using this model myself; my wife is building a business using this model; a friend is just starting up using this model.

This business model is simple, straightforward, easy to start, easy to manage, scalable, and profitable. Yes, it really is that awesome!

  1. Start by creating a blog about an area of expertise you are comfortable talking about. (It should be a topic that you are interested in focusing on for a while and are passionate about).
  2. Add content to your blog for a while. Then start up the next steps but continue to add content to your blog.
  3. Write a report and a series of email newsletters on your topic. Create an account at an email marketing platform (I really like Aweber.com) so subscribers will sign up to get your report and emails.
  4. Write an ebook about your subject matter and put it up for sale through Lulu.com or Clickbank.com.
  5. Create a service that you can sell (such as coaching, consulting, freelance whatever).
  6. Set up a Twitter account and connect with others.
  7. Set up a Facebook page for your business and connect with others.
  8. Start promoting your business. Use a variety of internet marketing and traditional marketing to get the word out.
  9. Continue blogging, interacting, marketing/promoting, and releasing new products or services on this topic… and if you ever want more business then just ramp it up even more!

This is SO easy for almost anyone to do. If you are thinking about starting a business, this is the fastest way to get it running.

For want of a nail: Why I’m writing my business plan

Do you hear the beep-beep-beep of a truck backing up? That’s me.

Image by klepas via Flickr

I’ve been writing for years but never had an official business plan. (Gasp). It’s not like I wake up every day and think “what the hell will I do today?”. I DO have plans. But they are mostly back-of-the-envelope plans, back-of-the-napkin plans, palm-of-my-hand plans (a la Sarah Palin), and seat-of-my-pants plans. And most of my business’ success is a direct result of world’s greatest sales funnel plan — a four-step checklist I do every day that has generated enough of an annual wage to keep me from becoming a hobo.

Things have gone very well in my business with this scattered situational plan approach and the advantage is that I can tweak and modify and adjust and rearrange at will.

But in the fall I was thinking about 2010 and I had a number of projects I was thinking about taking on. Some fit my brand. Others did not. No big deal. But it made me think about my brand. Was it doing what I wanted it to do? Was it going where I wanted it to go? Were there opportunities I was missing? etc.

And that’s when the truck started to back up. Beep-beep-beep-beep…

If I was going to think about these projects, I needed to think about my brand. If I was going to think about my brand, I needed to think about my target market. If I was going to think about my target market, I needed to think about my deliverables.

… and on it went until I was lost in a forest of question marks.

Those question marks multiplied as 2010 arrived and marched on by. I was exploring some joint ventures, I’ve been doing some in-depth studying on different aspects of my business, and I was approached by clients who were outside of the kind of clientele I would normally take on.

I needed to nail down aspects of my business that weren’t nailed down. Not so that I stick with them to the detriment of all else but rather so that I have a framework from which to make better decisions and on which I can build the next phase of my business.

Finally, in a frenzy of tears and swearing (just kidding) I decided to write my damn business plan already. After all, I’d been helping other businesses create their business plans for years. The business plan writing process is certainly not new to me and I have plenty of the legwork done already (like my “cash-machine sales funnel” and Sarah-Palin-inspired palm-written notes).

So it has begun. I’ve set aside time to write one step each week for six weeks (hey, I’ve got to work, too). I’m really looking forward to the process. And shortly you’ll start noticing some of the changes yourself. Don’t worry, nothing ridiculous. I’m not going to change become a network marketer or anything. I think this is more of a refining process; something to create a solid foundation so I can build from here. And once I get into a bit of a groove, I’m going to start sharing some of the business plan best practices that I’m finding helpful as I go.

Oh, and in case you’re curious about the title, it references the following poem:
For want of a nail the shoe was lost.
For want of a shoe the horse was lost.
For want of a horse the rider was lost.
For want of a rider the battle was lost.
For want of a battle the kingdom was lost.
And all for the want of a horseshoe nail.