A business plan is a critical document that lays out the roadmap for a company’s success. It serves as a guide for entrepreneurs and business owners to achieve their goals, attract investors, and secure funding. Developing a business plan can be a daunting task, but with the right approach, it can be an enjoyable and rewarding experience. In this article, we’ll discuss the best practices for developing a business plan.
1. Don’t Rush The Plan. Put your heart into it. Sweat more on Paper – Bleed Less In Business
The number 1 reason why most plans fail, is due to limp-wristed, half-assed planning. This leads to a BS checklist mentality packed into a plan that’s not really designed to be executed or utilized. The reality is, the more time you spend sweating as you develop a robust business plan, the less time you spend bleeding money and time in your early years. This is especially true if you have an advisory board to help you develop your plan. And this is necessary if you’re going to seek capital investment to get started.
2. Find a panel of discerning pricks to ensure your plan is mission-ready
Before you get started you should pull together an advisory board of at least 3 people to review all of your draft plans. These people should have an approach like NASA engineers (NAS-holes), and have pass/fail standards that your business plan is to build a rocketship to go to the moon. Their job is to ensure your plans are mission ready, and stress test it with scenario planning.
3. Conduct a thorough market analysis
Before starting to develop a business plan, it’s important to conduct a thorough market analysis. This involves researching the industry, target market, competitors, and other relevant factors that could impact the success of the business. By doing this, entrepreneurs can gain a better understanding of the market, identify trends and opportunities, and determine the feasibility of their business idea.
A Google Search WON’T Cut It- Get First-Hand Interviews From Those In The Field
Personally interview at least 3 leaders or managers who have been in similar business models for more than 5 years. Get a feel for their aptitudes, attitudes, challenges of the business. Ask them about what their competition gets right and wrong. Be thorough in your interview process.
If you’re new to entrepreneurship – Develop a ramp up plan that gets you first hand experience as part of your business plan
I don’t know about you but I LOVE getting paid to learn. And smart entrepreneurs get first-hand knowledge where they can. What better way to develop a robust business plan, than to get some reps in the real world?
4. Define the business model
The business model is the foundation of the business plan. It defines how the company will generate revenue, how it will operate, and how it will create value for customers. It’s important to clearly define the business model and ensure it aligns with the company’s overall goals and objectives.
Book recommendation – Business Model Generation – This is a must read for all business owners. It’s like the business equivalent of having all the lego instructions for every kit in one book. And it’s full of pictures!
5. Set realistic goals
A business plan should include specific, measurable, achievable, relevant, and time-bound (SMART) goals. These goals should be based on the market analysis and the company’s capabilities. It’s important to set realistic goals that are challenging but achievable. This will help entrepreneurs stay focused and motivated, and it will also impress potential investors.
Pro Tip – Your goals need to be realistic, and your plans should describe how you will achieve the realistic goals. All too often, people create vague goals like -”Build the Thing and change the world in 3 years” – That is NOT a smart goal. Don’t talk about moon shots or changing the world. Talk about going from running this out of your backpack and coffee shops and getting to some square footage and your first hires.
6. Develop a marketing strategy
A marketing strategy is crucial to the success of any business. It outlines how the company will promote its products or services to its target market. The marketing strategy should be based on the market analysis and the company’s goals and objectives. It should include details such as the target audience, the messaging, the channels used to reach the target audience, and the budget.
Details Matter – Word of Mouth, TikTok, and AI, are not marketing strategies. Your advisors should make you do 10 burpees for every vague section of your business plan. Believe me if they did, you’d stop being so vague.
7. Create a financial plan
A financial plan is a crucial component of the business plan. It outlines the company’s financial projections, including revenue, expenses, and cash flow. The financial plan should be realistic and based on the market analysis and the company’s goals and objectives. It should include details such as the startup costs, the sources of funding, the break-even point, and the expected return on investment.
If you’re seeking funding – create a plan as if you’re going to bootstrap. This level and path of planning will be much appreciated by potential investors. If you’re not willing to take the time to make a plan to bootstrap, why should they give you their money? And, before you ask for money, try to show revenue from sales with projections for the next quarter or year.
8. Identify potential risks and challenges (and how you will address them)
No business plan is complete without identifying potential risks and challenges. This includes external factors such as economic conditions, changes in the industry, and new competitors, as well as internal factors such as operational issues and personnel problems. By identifying potential risks and challenges, entrepreneurs can develop strategies to mitigate them and minimize their impact on the business.
Your risk mitigation strategy is part of your business plan.
9. Seek feedback
Revisit point number 2. Developing a business plan can be a solitary task, but it’s important to seek feedback from others. This includes mentors, trusted advisors, and other entrepreneurs. They can provide valuable insights and feedback that can help entrepreneurs refine their business plan and make it more effective. Make sure these are trusted advisors, you don’t want someone running off with your intellectual property.
10. Update the plan regularly
A business plan is not a static document. It should be updated regularly to reflect changes in the market, the industry, and the company’s goals and objectives. By updating the plan regularly, entrepreneurs can ensure that it remains relevant and effective.
11. Have 4 contingency plans – Remember PACE – Primary, Auxiliary, Contingency, and Emergency
No business plan is foolproof. It’s important to have a contingency plan in case things don’t go as planned. This includes having backup funding sources, alternative marketing strategies, and plans for pivoting the business revenue model if necessary.
Entrepreneurs should approach the development of their business plan with the same level of diligence and attention to detail as they would any other aspect of their business. By taking the time to create a solid plan, entrepreneurs can increase their chances of success, attract investors, and secure funding. Your plan can also serve as a roadmap for the company’s future growth and development.
A well-written and comprehensive business plan is an essential tool for any entrepreneur or business owner. By following the best practices outlined above, entrepreneurs can create a plan that is both effective and achievable. Whether it’s a startup or an established business, a business plan can help entrepreneurs stay focused, motivated, and on track to achieve their goals.
Creating a plan can take many forms. At Heroik Media & Technology Group, we transform good ideas into sound strategies & bring them to life From Thought to Profit.™ If you would like a free consultation to learn more about the HEROIK Business Canvas and how it can help you, please head over to www.heroikmedia.com and set up a cup of clarity meeting with us!
Writing a business plan should feel like hell-week for the navy seals. It is a gauntlet of thought work that will serve you as well as you serve it. If you put in a weak effort, you will be underprepared and likely fail over and over and over and over again. You will feel like crap and likely quit early. This is why it is essential to have an advisory board who will hold you to a high standard of planning, not your intro-to-business professor who has never successfully built and operated a business for more than 5 years.