The Business Plan on a Napkin

Part A: Prove the Idea Works

One of the business plans I respect most was written on a napkin. Ron sat down, took a napkin, and wrote out what the business would do, who it would sell to and roughly what the numbers had to be. That was the plan. It worked because he understood what the plan was for.

So what is a business plan for? It is the first honest look at your foundation, and nothing you write to impress a bank and then never open again: what the business will do, who will pay for it, and how the money comes in. If you can answer those on a napkin, you have a plan. If you cannot answer them in forty pages, you do not.

Two documents, one purpose

There are two documents I recommend when you start. The business plan is the wide view: what you sell, to whom, how you will run it, what it costs and what it should earn. The marketing plan is the focused view: how you plan to spread the word so those buyers actually find you. People treat these as two separate chores. They are the same thought written at two zoom levels, and the marketing section is the one most owners leave half empty.

You do not have to invent the outline. Free guides and templates exist from the SBA and from SCORE, a network of volunteer business mentors, so that people like you can start faster. Take one, and use it as a list of questions rather than a form to fill.

Be realistic about the numbers

Here is where the napkin either helps you or hurts you. Writing a plan is easy. Writing one that is accurate takes discipline, because it is very tempting to write down the revenue you hope for and the costs you wish you had. The plan is only worth something if you can stand behind every number when a hard question is asked.

Where do you get realistic numbers? From people who have already done it. Talk to owners in your industry, to the vendors you will be buying from, to the professionals you will hire. Suppliers can often tell you what a typical customer in your trade buys in a first year, and owners in your trade can tell you what they spent. Ask them. Do not expect an accountant to share client numbers. We cover research in a later lesson, but do not wait for it to start asking.

And the one number I see underestimated in nearly every startup plan I read is the marketing budget. Owners write down what they can afford after everything else, which is usually close to nothing, and then wonder why nobody knows they exist. That has its own lesson in this track. For now, when you write the number down, ask yourself whether it is a budget or a leftover.

What must be on the napkin

Whatever template you use, make sure you can answer these plainly. What are you selling and to whom? How does a customer find you and how do they buy? What does it cost to deliver, and what will you charge? What has to be true each month for you to pay yourself? What will you spend to make people aware you exist? Which of these tasks will you do yourself and which will you pay someone to do?

Notice that most of those questions are about the system around the product, not the product itself. That is intentional. A plan that is ninety percent about how great the product is and ten percent about how anyone will hear of it is a wish, not a plan.

Write the plan knowing you will be wrong about some of it. That is fine. A plan you revisit every quarter and correct is far more valuable than a perfect one you never open. Ron’s napkin was right enough to start, and honest enough to correct.

Your one page

Take one page, or a literal napkin if that helps you keep it simple, and write the answers to the six questions above in your own words. No template, no software. Where you do not know a number, write “find out from” and the name of a person who would. That list of names is your first week’s phone calls.

Time and money

The napkin version takes an evening. A proper plan built from a free template, with real numbers gathered from people in your industry, takes four to eight hours spread over a week or two of conversations. It costs nothing but time and a few coffees. Paying someone to write it for you is possible, but it tends to produce a plan you do not believe in because you did not do the thinking.