Do you need to write a business plan? How to know when you must and when you shouldn’t
Today I want to share a different perspective with you on writing business plans. If you are starting a new business, do you need to write one? What if you’re the only employee in your company—is there a need to write a business plan if no one is going to read it but yourself?
I used to be a master at writing business plans! I loved reviewing them and I loved writing them, even if I was the only one admiring the results of my work. But I don’t do that anymore and here’s why:
1. Write a business plan for others, not for yourself
Traditionally, business plans are written for people outside of yourself—namely partners, shareholders and investors. It’s a standing document that communicates your long–range vision for the company as well as the steps on how you will get everybody there—and whether they and their money will be happy or really happy with you, and how likely they will be happy with you. It also paints a full picture of the company’s strengths, weaknesses, opportunities and threats (the SWOT analysis), the assumptions and the market, and how the company plans on using, distributing and generating cash.
If you are trying to bring investors and partners onboard, you will need a business plan. The business plan is a roadmap for how you propose to materialize your vision and it communicates (and manages) the expectations others will have of you. Think of it as literally a roadmap or a manual to your business. Unless people are investing in you blindly, they will want to see the entire picture, down to the nitty gritty, of the kind of ride (either a turtle’s crawl, a bike ride around the block or a monster roller coaster!) you plan on taking them and their money through.
Plus, here’s what’s interesting: if you are writing a business plan for others, you start venturing into the territory of copywriting! That’s right—the act of languaging your idea and inspiring and influencing others to action.
2. If you work for yourself, you likely don’t need a full–blown business plan
The reason is because business plans are strategy documents to lay out your vision to others, in order to help them understand what you’re trying to do and also help them see what you can see. Because there is no one to convince, persuade or bring onboard—if you’re the only employee in your company— then you can forego the business plan and opt for something that’s useful to you. After all, you’re gonna be the only one using it! That could be anything from keeping to–do lists to short term milestones to an income calendar to yearly intentions.
The main thing is, if you are presenting your business to others, you’ll want to project far and wide into the fairly distant future (5 years is the norm), but if you’re working for yourself, bring that vision up close to where you are now and where you will be tomorrow and in the next few months. Better yet, distill that vision into your next action steps.
3. The reality is, though, you can’t plan that far ahead
While it’s nice to know what your 5–year projections are and what your SWOT analysis tells you—realistically, you just can’t plan that far ahead. Practically speaking, there are so many variables to growing a business and that depends on so many factors—your customer, what prices the market will uphold, the psychology of the customer, whether you are able to sign on certain partners or distributors, the resonance of your ad campaigns, or whether your product or service reaches a tipping point.
What you also can’t plan for is your personal energy and your choices. What if, after a year of working in your business, you decide that a different direction is better for you? What if you realize you don’t actually like this industry after all? What if you come down to earth and realize you simply can’t do everything you set out to do, due to limited time and energy? What if you suddenly become pregnant or you need to move to another state or country—and everything changes? I’ve never seen anything that I’ve planned far in advance ever pan out exactly as I had expected. That’s just life!
Business plans account for the “that’s just life” factor by spelling out the profiles of the executive teams, and on financial projections, it will be heavily conditioned or ambiguous by using words like maybe, perhaps, probably, likely, possibly, sometimes, may, may not, unlikely—and the list goes on. Sometimes it is so heavily conditioned or ambiguous that the business plan starts to just feel like one big, uncontrollable, unknown illusion. Read and write enough business plans and you’ll know what I mean! You can’t nail down a cloud.
Over–planning also constricts creativity, imagination, happy accidents and miracles. In a way, planning reflects back to you the expectations you have for yourself (and how they likely come from your shame center) and it also reflects the degree of trust, faith and power you give over to the Universe for the unknown and unexpected.
Plan for today—good. Plan for tomorrow—good. But planning too far into the future is where you start to limit the capacity for what’s possible and there is a chance that you will start to get too attached to the outcome. And that’s where too much future planning takes us: expectations of a certain outcome that we’ve pre–written. Plan, but don’t plan for the outcome. No one knows what the outcome should be. All the planning in the world cannot tell you what the outcome should be.
4. Beware of incubation
One thing I noticed about myself in my earlier days as an entrepreneur is that whenever I had a business idea, the first thing I would do is go write a business plan. I’d create these marvelous, text–heavy documents but here’s what I noticed: I never re–read what I wrote and I would never take action on the actual idea. That’s when I realized that sometimes, business plans are a form of resistance. Investing your time and energy in writing one can take you away from taking real action. In other words, a business plan can sometimes be an extended form of a napkin sketch—more incubation.
Nowadays, when I have a business idea, the first thing I do is take real action, which can mean: making a phone call, getting my idea priced, turning it over to a subcontractor to further develop my idea, showing the idea to potential customers to get early market feedback, or just putting it out there. By taking concrete, grounded action, you actually move your idea forward in a measurable, tangible, and productive way. You’re also collecting real market information that’s crucial for making your idea into a success, not just dreaming up imagined scenarios of what ifs for your business plan, which you may never end up re–reading or even following.
If the business plan is filled with too many imagined scenarios, whether good ones or bad ones, it can serve as a mind–block to you moving forward. By thinking and analyzing too much on what if, could, would or should happen, you drain yourself from life force that’s needed to go out and play with, be curious about, and test your idea. As you probably know, thinking too much about anything keeps you swirling up in your head, and that’s when it’s hardest to take action—when your mind already gives you the illusion of being busy with progress, when in fact, you’re not actually going anywhere.
Sometimes, entrepreneurs choose to write business plans as their step 1 rather than taking action, because they might think that they’re powerless without first securing an investor. The thing is, investors can discern immediately who has done their homework and is fully versed in their business and industry, versus those who are too scared to try anything or do anything before they feel safe being backed financially. Who do you think investors will choose to back: those who are resourceful and have done their homework, or those who haven’t even bothered to test their assumptions in the real world first?
5. If your business is complex, write a financial plan
Simple online businesses—for example, if you are selling coaching services or selling your art online—are simple. But if you run a complex business that have lots of pieces and parts—for example, if you are running a retail store in the traditional brick–and–mortar world—then it’s a good idea to have a financial plan.
The financial plan helps you identify all of the costs associated when bringing your product and service to life. If you are opening a laundromat, for example, cost is found in the tags you put on the customers’ clothes down to the detergent to the electricity to the hangers you provide. If you’re opening a restaurant, you’ve got to know the cost of every dish you are making—the cost for sourcing your ingredients to how much time, labor and electricity it costs to provide that dish. Identifying all your expenses helps you see where your operating costs are going and how that translates into your profit margin—how much money you’re making.
6. If you write a business plan, make it your own
The traditional business plan is rigid and structured. You’ll be expected to discuss your target market, SWOT, assumptions, financial projections, operating costs, profit margins and all of that. If you are using this only for yourself and not presenting it to shareholders and investors, you can make your business plan however you want it to be.
For example, it can be a business board rather than a plan printed on pages of paper. You can do it in a journal with colored pencils and magic marker. You can even record your ideas and vision into your phone and have it play back to you as audio files. Pick the medium that helps you get clear on your vision and goals and what you anticipate out of all the action you’re taking. Make it something that inspires you when you’re feeling discouraged, uplifts you when you’re feeling low, and realigns you to your purpose and vision when you’ve fallen off the rails.
Hi, I’m Ana Coeur
I teach entrepreneurs how to create their business straight from their soul. I offer a complete Intuitive Business Suite to help you create, design, write and sell all from your intuition. Here’s the services you can take advantage of to empower your business: Intuitive Web & Brand Design, Intuitive Copywriting and Intuitive Selling. If there’s anything I can help you with, I would love to hear about it! You may email me at anaintuitivepicture.com
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