How to create an effective business plan
seven specific questions can help you make sure your business plan tells your story.
A customer counts his cash at the register while purchasing an item at a Best Buy store in Flushing, New York on March 27. One business plan template will not work for every entrepreneur. When developing your business plan, it should reflect the story of your specific small business.
Jessica Rinaldi/Reuters/File
One of the problems with business plans is that they have gotten to rigid and formatted.
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Jeff is the Jack C. Massey Chair in Entrepreneurship and Director of the Center for Entrepreneurship at Belmont University in Nashville, Tenn.
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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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