How to create an effective business plan
One of the problems with business plans is that they have gotten to rigid and formatted.
Some of this is self-perpetuating. People look at other people's plans that have gotten funding and we see a common pattern emerge.
Some of this is due to the business plan software that is out there (here comes the onslaught of e-mails and comments from that industry!!). People buy the software and then simply fill in the blanks.
MyVenturePad has a link to a post by Seth Godin at his blog that makes a good point about business plans:
It's not clear to me why business plans are the way they are, but they're often misused to obfuscate, bore and show an ability to comply with expectations. If I want the real truth about a business and where it's going, I'd rather see something else. I'd divide the modern business plan into five sections:
- Truth
- Assertions
- Alternatives
- People
- Money
His post is worth reading before you write your next business plan.
I tell my students to use your plan to tell a story that answers a few key questions:
- What are you hoping to do?
- Why is this an opportunity? What is happening in the marketplace to make this work?
- Specifically who is feeling "the pain" that creates their need for this product or service? What will you need to do to get their business?
- Who will you have to fight to get these customers to buy from you?
- Specifically what will you offer and for how much? How will you let them know about you? How will you deliver what you offer to them?
- What resources and people will you need to make this work?
- What does this story look like in numbers?
I don't need to see industry codes and other useless details. I do not need you to snow me under with industry data that does not add to your basic story.
Tell me a logical story that holds together. (See my earlier posts on business modeling on how to make this happen).
Make it a realistic story. Make it a believable story. Make it a story that is not an act of fiction. And for goodness sake, make it your story.
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