Hello and welcome to this sixth video in our series.
In this video we are going to focus on how to document your business plan such that the effort of writing and maintaining it is more than repaid by the focus and insights that it creates for you and your team.
We are going to recommend a particular tool to help you, on the understanding that we have nothing to gain by doing so. We receive no commission or compensation of any kind. Rather, we believe that one of the ways we can add value to your business is by doing the research for you, and finding the SME-appropriate solutions and tools that will help you achieve the outcomes you want.
As previously, we’ve structured this video and the transcript so you can watch or read the whole thing, or jump to the sections that interest you most.
The areas we will cover in this video are shown here, so let’s get started:
- What Is A Business Plan?
- Six Reasons To Write A Business Plan
- What Your Business Plan Should Include
- Writing Your Business Plan: Four Simple Tests
- Our Recommended Solution: Ten Criteria
- How To Get Started
- Next Steps
- Helpful Links
What Is A Business Plan?
At its simplest, a business plan is simply a document that creates a shared understanding of the ambitions and intentions of a business,for the benefit of its stakeholders.
Perhaps the shortest and best known example was the ‘Secret Tesla Motors Master Plan’ famously penned by Elon Musk in August 2006, which was just 31 words long and read:
- Build sports car
- Use that money to build an affordable car
- Use that money to build an even more affordable car
- While doing above, also provide zero emission electric power generation options
A more complete definition might be: a documented description of the vision and measurable goals of a business over a given time period, including the resources, strategies and plans it will deploy to achieve them, and any insights, beliefs and assumptions that have influenced these choices.
It follows that business plans are equally useful for start-ups and established businesses. Let’s look first at why you might invest the time and effort to create one.
Six Reasons To Write A Business Plan
There are many reasons why writing a business plan is a good idea, subject to the recommendations set out later in this blog:
- Firstly, to clarify your own thinking – writing something down is very different from carrying it around in your head, and typically uncovers any ideas that are not yet fully formed.
- Secondly, it will enable others to challenge and refine the plan – the document acts as a focus for stakeholders to consider and comment on its contents before you move to more detailed planning and execution. This might result in you considering different scenarios, for example, allocating resources more efficiently, or better understanding others’ concerns.
- Third, to engage internal and external stakeholders’ support for your plan, be that with financial investment, advocacy, or simply heightened motivation to contribute to it by virtue of being consulted.
- Fourth, to enable you to monitor your progress against the trajectory and milestones anticipated in your plan, and make adjustments if needed.
- Fifth, to provide a clear basis against which to evaluate the possible impact of changes in your trading environment for the insights, beliefs or assumptions that underpin it. This is especially so in today’s unprecedented pandemic context.
- Finally, to learn through revisiting the plan with the benefit of hindsight, and applying any insights gained to future planning and execution. These insights might include, for example, the extent to which your original forecasts were accurate, and you under- or over-estimated the influence of external factors.
As you consider how best to equip your business to continually adjust to the pandemic, without losing its sense of purpose, culture or direction, the act of documenting a business plan consistent with the guidelines below will help you and your team keep sight of the bigger picture and remain, to the maximum extent possible, masters of your own business destiny.
What Your Business Plan Should Include
Your business plan should include only what is necessary to achieve your objectives in writing it, at least where the majority of SMEs are concerned. (One exception to this rule might be those operating in regulated markets, for example).
This rule is important, as only then will the plan feel relevant, practical and valuable to its intended audiences.
If the audience is financially focused, they will likely want to see numbers. If their engagement with the business is more purpose-driven, they may prefer to see pictures from the ‘field’ and read about the societal impact achieved to date and that could be achieved in future. If the owners of the business are preparing for exit, then this again will suggest a different approach.
As a general rule, aim to create the minimum possible to achieve your objectives, and focus on ensuring that this content is presented optimally to appeal to and influence your target audience. With this in mind, you might consider creating more than one version.
Typically, a business plan will include some or all of the following:
- An executive summary
- A description of the business including its type, ownership and a summary timeline
- The company’s purpose, vision, high-level goals and milestones
- A description of the opportunity the business is looking to seize, or the need it wants to fulfi, including an overview of what has given rise to them, relevant trends plus recent and anticipated developments
- Its customer groups, the solutions it will offer each one and the channels it will use to engage with them
- Key strategies and plans: sales and marketing, operational, HR, financial
- Management team members, roles, relevant experience and capabilities, and organisation structure. Any non-executive directors or advisors
- The critical activities and resources the business will need to bring in-house
- The key resources and capabilities that the business will outsource, and to whom
- An assessment of the competitive landscape and other external factors that are outside the control of the business
- A financial summary that quantifies and plots the above over the time horizon anticipated in the plan, highlighting the sources and applications of funds, and how sensitive any projections are to assumptions, external risks and unknowns that remain to be firmed up
- An appendix with supporting documents, data and details.
Writing Your Business Plan: Four Simple Tests
Before starting to write your business plan, be sure that the exercise will pass these four simple tests:
- First and foremost, the time and effort you invest in writing it must be outweighed by the benefits it delivers. This will require in turn that:
- The solution you use must provide a hassle-free way of publishing your plan and enabling contributors to share their observations and insights
- It must enable you to efficiently present information in a variety of formats, in order to accommodate the preferences of different audiences
- The finalised plan must be easy to access, update and use both to evaluate different scenarios and measure your progress.
- If you are not confident that the process you are about to embark on will pass all of these tests, then there is a real risk that your time (and that of your colleagues) will be wasted and/ the plan will end up gathering dust rather than serving as a live business management tool.
Our Recommended Solution: Ten Criteria
In conducting our search for a solution that we could recommend, we had several criteria in mind:
- Designed for SMEs: we wanted a solution that had been designed from the outset to satisfy the needs and realities of SMEs
- Ease of use: our acid test was that we felt able to open the solution for the first time and start using it immediately, if only at a basic level. It should be intuitive, and not require hours of learning. Being intuitive meant that it must also be configurable for use in local currencies.
- Proven in practice: we wanted reassurance that the solution had been thoroughly road-tested with a wide range of SMEs, and that it was proven to be fit for purpose
- Live product development: it had to be a solution that is still in active development, so that a decision to invest time and resource into it will be rewarded with regular and relevant improvements
- Affordability: the entry cost and any additional investments to scale the number and type of users had to be affordable to the majority of SMEs and suggest that a positive return on investment would be achieved. Any contracts should be easy and inexpensive to terminate.
- Security: it must offer adequate security commensurate with the type of information being entered into it, and the likelihood that multiple users will access any given plan
- Comprehensive help resources: it had to be quick and easy to access help with any aspect of the solution, including the option to speak to a human!
- No special infrastructure: it must be usable with the type of equipment and networks available in the vast majority of SMEs.
- No accounting qualification or jargon: it must be comprehensible to audiences from all business functions and backgrounds.
- Integrations: it should ideally offer integrations that enable existing data to be imported into the solution, rather than duplicated.
After many hours of searching and trying out different solutions, raising help questions and generally ‘having a play’, one solution stood out from all that we tried because it best met our ten criteria.
That solution is called Liveplan, which was created and is still being developed by Palo Alto Software in the US. Links to the website and help centre are provided in the Helpful Links section at the end of this blog.
If you watch some of the Getting Started videos, you will quickly get the sense that this is a product created for SMEs, and one which offers time-saving features at every step of the way. Perhaps most importantly, it offers the reassurance that many people have gone before you, and that the team at Palo Alto understands your challenges and concerns and has answers to your questions.
Being in the US, they come on stream at 4pm UK time, however once you understand this you can easily work with it, or lodge questions outside these hours by email which will receive a response once they come online.
We made numerous requests of the customer success team, and on every occasion their responses met and usually surpassed our expectations.
There are many good reasons why documenting your business plan should repay the investment of time and effort you put into it.
Before you start, check that the tools and process you are going to use will meet the four simple tests outlined above. If so, you stand a much better chance of realising all of the benefits on offer.
As a general rule, aim to create the leanest possible plan to achieve your objectives, and focus on ensuring that your plan is presented optimally to appeal to and influence your target audience(s). With this in mind, you might consider creating more than one version.
There are solutions available that are tailored specifically for SMEs, that will guide you through the process and do much of the heavy lifting for you, leaving you to focus on the clarity and quality of your thinking, and that of your other contributors.
Having reviewed several of these, our recommended solution at the time of writing is Liveplan, by Palo Alto Software, which best meets all of the criteria we set at the outset of our search.
How To Get Started
Start by thinking through what you want to achieve by documenting your business plan, who it will need to influence, and who will need to contribute to it.
What are the steps you need to take, and the information you will need to gather, and how can you do so most efficiently both for yourself, and for your contributors.
What is your timeframe – if it is short, consider if you need to manage expectations now to ensure that contributors include time for your plan in their schedules. Be clear with them about what you will need them to do; either as original contributors, reviewers, to approve the plan overall, or all of these.
If you don’t have a tool and process that will facilitate all of the above easily, take a look at Liveplan, by Palo Alto Software. Having done much of the research for you, we are confident that the tool plus the help resources behind it will save you time and effort, and help you produce a business plan that is fit for purpose and will more than justify that time and effort needed to create it.
If you have any questions or comments on anything we have covered in this video, please leave them below along with your rating of it – we are always pleased to hear from you and promise you a quick reply.
If you believe there is more potential to be uncovered in your business, and would like to discuss if and how we might be able to help, book a free, 30-minute introductory call using the link or the buttons provided. We’ll be delighted to talk to you.
Thank you for your interest in Planned Ascent and whether or not we hear from you, we wish you the very best of luck with your business.