Business Plans Come In All Shapes and Sizes

Dave-Archer-cc1I frequently, probably incessantly, talk about every business needing a business plan. For many people, this conjures up a vision of a 100-page, professionally-printed, spiral-bound, full-color document. In reality, business plans – like entrepreneurs and small business owners – come in many shapes and sizes.

Before looking at some of the popular formats, it’s important to realize that a business plan is merely a way of displaying the results of your business planning process. As General Eisenhower said when preparing for the Normandy landings on D-Day, “Plans are nothing, planning is everything.”

To understand the difference, let’s look at a backyard deck. You can go the lumber store and start buying stuff; or you can draw a sketch, take some measurements, create a list, and THEN go to the lumber store. Which is likely to be the best use of your time and money?

Similarly, the first step in developing a business plan is to start thinking about your current or planned business. What are you selling? How many? To whom? Who’s your competition? What will you charge? What expenses will you face? Who are your suppliers?

Once you’ve answered those questions, it’s time to commit it to paper. In choosing the best format for your business plan, first decide who your audience is and what you want to accomplish.

Most people develop business plans just for themselves. In this case, you may end up with several pages of key concepts, ideas, comments, thoughts and figures, similar to the sketch of the deck mentioned earlier.

If you’re seeking a bank loan, however, you’re probably going to need a very detailed plan that includes historical data and future projections, especially as it relates to your financials.

College business plans often require detailed information so that the judges can determine if you really understand the business planning process. NCET, for example, requires a 30-page document with complete financial projections.

When you’re asking someone to invest in your business, a two-or-three page “executive summary” may be just fine. Keep in mind, however, that it is merely a summary and that you will need to have the back-up material to answer the questions your executive summary will certainly raise.

A new business plan format is the “canvas” which Project Vesto used in its recent business plan competition. The canvas reduces your business plan to a series of short-hand bullet points which allow investors or judges to quickly review a large number of business ideas. While this seems fast and easy, rest assured that you’ll still need to have gone through the planning process to develop and back-up your bullet points.

As always, the Nevada Small Business Development Center (www.nsbdc.org) is one of the best sources of help and information on business plans.

Dave Archer is President and CEO of NCET – Nevada’s Center for Entrepreneurship and Technology. www.NCET.org