In my view, a business plan is a useless product, but a very, very useful process. A business plan is NOT a product. If you work on one, and print it and use that as a guiding document, it will be an utterly useless exercise. A business plan is nothing but a plan for your business covering what you want to do, how you will do it and how you will make money doing that.
Here are a few steps I have found useful in working on a business plan.
- Start with a ‘story’ – ‘See the film in your mind’ about your venture – what do you want to do, how large do you want it to be, what will make you happy, what are your aspirations, etc. Imagine it as a business a few years down. This gives you a good view of ‘what you want to aim for’
- Work out rough milestones and goals: Your long-terms goals and aspirations should then be broken into short-term and long-term milestones, which are the stepping stones to your eventual destination.
- Think deeply of how you will implement it: This is the critical aspect of planning your implementation. This also gives you a view of the cost structures, the infrastructure & people needs, processes, etc.
- Work out the ‘structure’ of an excel sheet: Now, after you have done the thinking, it is time to use an excel sheet to evaluate if there is a business case in what you plan to do. Before you start entering numbers, work out the ‘structure’ detailing every cost head and revenue stream.
- Start working in the excel sheet – assumptions are critical: An excel sheet exercise with the wrong assumptions is going to give you a very wrong direction, and perhaps wrong hopes. Be realistic. Be conservative.
- Work on multiple ‘scenarios’: Life does not play out the way you plan it. Real life situation will be different than your excel sheet plans. It is therefore essential for entrepreneurs to work out multiple scenarios to see how the business will pan out under different outcomes.
- Finally, articulate it into the ‘presentations’: Once your ‘Business plan’ is ready, you then articulate it into different presentations. Even an executive summary is one articulation of the B-plan. You can have an executive summary for introductions, a 8-10 slide ppt for first meetings and more detailed documents and presentations for follow-up meetings where specific details are going to be discussed.