Your Business Plan Is Your Adderall.
Before diving in, note that this isn't a comprehensive 'how-to' guide for writing a business plan; it's my insights on each section, along with a summary of callouts I believe are often overlooked.
At the end of the day, a business plan is intended for a founder to stay focused and follow a clear path to success.
Initially, I didn't understand this. When writing business plans I focused on what I thought others wanted to hear. That was a mistake. Instead, view this plan as a tool to put your energy toward the fundamental concepts you want to bring to fruition. It will also help you guide decisions based on the values you determine you want to lead with.
Written below are the callouts I find important to mention about each part of a business plan.
Executive Summary
This section provides a condensed overview of your entire business plan. It outlines your product and business concept, detailing how it will be realized.
Try encapsulating each chapter below into a single sentence outlined here.
Company Description
This is your moral compass. Your mission statement, vision, values, and so on. This is where you need to decide what you stand for as a leader, and the principles on which you will make company decisions.
Market Analysis
This is the part where you determine where you will fit in your market. This is your 'attack plan' so you can come out guns blazing.
Before starting your business, you need to understand who else is already selling in the market and determine if it's feasible for you to win customers. The more specific you can be about your target customers and how you will differentiate from your competitors, the better.
Sales & Marketing Plan
This section outlines how you'll promote your product and facilitate purchases.
For instance, if you're opening a lemonade stand, your marketing will focus on attracting customers to the stand with a sign advertising lemonade. Sales will be conducted through in-person cash transactions.
Previously, I overloaded this section with various marketing tactics without a clear funnel. This plan will evolve as you learn how your customers prefer you build relationships with them. But start with a specific plan.
Management Overview
A big part of this section is to define the qualifications required for your management team. Before reviewing resumes, consider the essential skills necessary to optimize your company's performance. Identify any personal limitations you have so you will know where additional expertise is needed.
In the past, I've been excited about candidates who brought unexpected skills to the table, overlooking fundamental skills I actually needed.
Operations Plan
Develop a detailed operational plan outlining the tangible requirements for building the company. This encompasses the essential materials and resources needed to execute the outlined steps. For example, for a lemonade stand, items such as wood, paint, jars, water, sugar, lemons, furniture, storage, location selection, and permits are crucial. While not all details may be known initially, strive for granularity.
This section, along with the sales & marketing, is what I use most when building out my financial projections. Keep this in mind, what money do you need to spend in order to make your product?
Financial Projections
Building these projections will seem daunting, but their purpose is not the immediate realization of the numbers you project; rather, it serves as a guide to assess the viability of your business.
Projections help evaluate the balance between expenses, prices, and profits. Moreover, they serve as benchmarks to gauge success once in the market. For instance, if you projected selling 50 cups of lemonade in year 1 and end up selling 45 by EOY, you're on track. However, selling only 3 cups suggests a need to reassess elements of your business model.
That's All Folks
At the core business is simple.
Identify a demand for something people desire but currently lack.
Determine how to produce it at a price that allows for profit.
Market and sell the product to the target audience.
Focus on your idea, and pivot, but do not get distracted.
I'd like to hear from those of you who have experience writing business plans. What aspects of a business plan do you often see people overlook or missue? Your insights would be greatly appreciated.
