The Real Business Plan

Final Review: Plan, Decide and Launch

A dream becomes a goal when action is taken toward its achievement.

Ron wrote his business plan on a napkin. I told that story in The Business Plan on a Napkin because it is the right place to start: what the business does, who pays for it, and roughly what the numbers have to be. If you can answer those on a napkin, you have a plan. If you cannot answer them in forty pages, you do not.

But a napkin is where a plan begins, not where it ends. At some point you have to turn it into something you can work from, something you can hand to a partner or a supplier, and something you can read six months from now and see where you were wrong. That is the real business plan. It is longer because you answered the questions honestly, not to look serious.

What the working plan contains

Think of it as the napkin with the vague parts filled in. Free outlines from the SBA and from retired executives and marketers are a fine starting point, and the Working Business Plan on the Resources page follows the same order. Use any outline as a list of questions, not a form to fill. The sections that matter for a small business are these.

• What you sell and to whom. The customer in specific terms, and the problem you solve for them. If you did the one-page model, this section is mostly copied from it.
• Why they choose you. Your real distinctions, not “quality and service.” This comes straight from the competitive positioning lesson; if you have not done it yet, write your honest best answer for now and sharpen it later.
• How customers find you and buy. The path from a stranger to a paying customer, including who does the selling.
• How you deliver. What it takes to actually do the work: tools, people, suppliers, time. Which tasks you will do yourself and which you will pay for.
• The numbers. What it costs to start, what you charge, what it costs to deliver, and what has to be true each month for you to pay yourself. This is where startup costs and your break-even work live.
• The marketing budget. A number you chose on purpose, not what was left over.
• What could go wrong. The two or three things most likely to hurt you, and what you would do about each.

Notice that most of that list is about the system around the product, not the product itself. A plan that is all about how good your work is and nothing about how anyone will hear of you is a wish, not a plan.

Make every number one you can defend

Writing a plan is easy. Writing one that is accurate takes discipline, because it is tempting to write down the revenue you hope for and the costs you wish you had. Every number should be one you can explain when someone asks a hard question. Where did you get it? From owners in your industry, from the suppliers you will buy from, from the people you will hire. Ask them. Many are happier to answer than you expect.

Then write the plan knowing you will be wrong about some of it. That is fine. A plan you revisit every quarter and correct is worth far more than a perfect one nobody opens. Put a date at the top, and put a reminder in your calendar to review it.

Your next step

Take your napkin, or your one-page model if you have one, and open the Working Business Plan. Fill in only the sections you can answer honestly today, and mark the others “need to find out.” That list of gaps is the most valuable thing the exercise gives you, because each gap is a question to take to a customer, a supplier or a professional this month.

What it costs

Expect one to two weekends for a first working draft, and more if you have to chase down numbers. The template is free. Time with an accountant or attorney has a cost that varies where you live, so ask what a first conversation costs before you book it.