Who needs to write a business plan? Are they just for startups seeking capital? My name’s Barry Horowitz. I’m a growth and strategy consultant.
Most people think the business plan is just for startups seeking capital because that’s what we tend to read about. That’s certainly a common use, but there are many other reasons to have a business plan and to go through the process many existing companies go through this regularly. So let’s talk about why you need one and who you write it for.
Write a Business Plan for You
One reason to write a business plan is, of course, for you! One thing that matters is if you’re forced to write down your thoughts and give them structure, you’ll make sure that you’ve thought all of the elements through. It’s one of the best ways to make sure that you really have all the components for your business. The process helps you think about all the essential elements you do.
Write a Business Plan for Prospective Funders
You do, of course, need to write a business plan for prospective funders. That could be venture capital or angel investors. It could be a bank seeking a loan if you’re a smaller business. It could be relatives who are perhaps thinking about investing in you. It could also be prospective vendors in an early stage organization. Vendors are taking a risk too; they’d like to know what you’re trying to do and make sure that you actually have a plan.
Write a Business Plan for your Leadership Team
Then of course, there’s your leadership team. It’s most important that the plan provides a roadmap to make sure that everybody understands what’s going on. What are the assumptions? Who are we serving? What are we trying to accomplish? What are the things we’re supposed to do? What are the things we’re not supposed to do?
Size Does Not Matter
Good business plans should be concise. It doesn’t have to be a big document. In fact, a large document that sits on the shelf is pretty ineffective. I’ve worked with several organizations whose plans are only four or five pages long, but they’re easy to update. They’re also easy to review if they’re short, and it helps to make sure that the assumptions you made when you were developing the business plan are still valid.
So consult the consumer needs or the customer needs still valid. Are we still doing the right things? Are there competitors that we hadn’t anticipated? That helps you figure out which assumptions you should change and helps revise the plan to make sure that it still keeps you on track. So the key is that a business plan should be a living document that’s brief and concise. It can be easily shared, frequently reviewed, and helps provide the roadmap for the direction you’re trying to take the company