The business plan should serve as a visualization of how a business works. A business plan's purpose is to see if a business is viable, can be improved or has no hope. It is an especially valuable tool for growing businesses or businesses that are looking for rapid improvement.
A business plan must be dynamic.
A good working plan focuses on cash flow and margins with special emphasis on revenue streams. The following are some hints and observations that you will find useful when working with a business plan:
The purpose of a business plan is to get better business results – it has no other purpose.
The purpose of a business plan is not to make excuses, it is not to attribute blame; it is not about your past!
Use software, spreadsheets or a yellow pad to get a visual or graphic idea of your business plan.
Use graphics, spreadsheets or diagrams as aids or props only. Understand they do not represent reality!
Build the actual business plan in your brain. This gives a truer picture of a real life business plan.
Real life businesses are multi-dimensional with multiple components – there should be no part that is more important. If you cannot deliver it does not matter if you can sell and turn this statement around; is that not true as well?
A component is anything that affects the business.
The interactions of components can be quite complex. Search for simplicity first and then move to greater complexity.
Focus first on end-results and revenue streams and work backwards. This saves time, tends to produce higher quality results, and is easier and quicker.
Keep your business plan fluid and flexible. Rigid business plans become stale and less likely to produce desirable results.
Every now and then question the assumptions that underline your business plan. By reviewing this regularly you may come up with a breakthrough idea or strategy.
Practice. The more you work with business plans the better you get.
Understand that business plans are a way of organizing ideas and concepts. There is no formula or set of rules on how to build your business plan.
Every plan is unique.
Never think of the plan as a finished product.
Business planning is just a name for what many owners, entrepreneurs and managers do intuitively. A business plan is an attempt to put these 'intuitions' in a form that is more comprehensive and makes more sense.
