Reasons Why You Should Prepare a Lean Business Plan
Published January 17, 2012 | 
Whether or not you’ve ever thought about starting a business, at one time or another, the chances are pretty good that you received the same advice, to “be sure you prepare a business plan.”
Now, while we certainly agree this is great advice, the truth of the matter is that preparing a plan is easier said than done, and can be quite difficult. Over the years, countless entrepreneurs have discovered that developing a complete business plan is not only time consuming but it can also be a monumental struggle. The process can be overwhelming for most, and often falls in the pile of projects that never quite seem to reach completion.
The simple cause of this is that most people never have to create a business plan during their lifetime, although they have developed plans for everything else from “degree plans” to “career plans,” to “payment plans” and many other things that require some form of planning. Informal planning includes planning how you get to work, what order errands need to be accomplished, what needs to be packed for a trip, and many other planning decisions we are faced with daily, weekly, monthly and annually (i.e. tax returns, family reunions, birthdays, dental & health checkups, etc.). Of course, we learn to plan for many things “on the fly” or “by the seat of our pants,” with many times unexpected results we forgot to… that’s right, plan for.
Nevertheless, the investment of our valuable time and resources to create a business plan is essential for any business enterprise (startup or otherwise) and will help set the stage for the high-likelihood of your future success. It matters not whether you utilize your plan to raise capital, since it still details the use of any available capital. A comprehensive and dynamic lean business plan will become your roadmap for generating maximized profits and achieving your dreams.
A dynamic lean business plan is a tool that clearly and concisely identifies the processes of your business to be maximized for greatest results. The maximization of any process either streamlines or eliminates needless steps that when considered from a simple “time and effort” perspective, reduces unnecessary expense and cost that directly affects the “bottom line” or profit of the business. The positive effects of process maximization can be quite dramatic, and in many cases the difference between enormous success and complete failure, especially in slow, stagnant and recessive economies.
The Implementation or Action Plan
Published December 30, 2011 | Some people live in a dream world and never quit dreaming, some people face reality; and then there are people who are able to turn one into the other.
Does Your Business Plan need to include Your Implementation or Action Plan?
Besides not ever having prepared a business plan, most entrepreneurs and small business owners aren’t too sure about the implementation or action plan that is always included in the business plan. The main action plans are typically included as part of the operations section including details of key milestones that must be accomplished along with the timeframe for achievement.
Your financial projections and action plan should always be closely tied to give you a clear picture specific to both how much money your company requires and when.
Now understand that even the well-conceived and prepared business plan is just a useless pile of paper if it doesn’t address a roadmap or plan for implementation. This element of the business plan serves to clarify your objectives, assigned tasks with accompanying deadlines, and allows you to chart progress in reaching goals and milestones.
This is the practical element of your business plan that turns theory into practice. So, the plan remains on the drawing board until theory and practice are able to mesh in sync with each other. It is essential that the business plan be implemented with proper consideration to any deadlines you’ve set. Responsibilities assigned to each individual participant in the plan should be clearly defined and described. If developed and prepared correctly, the implementation plan becomes an essentially vital component of the completed business plan. When it’s all said and done, you must have a clear idea of the realistic impact of your business ideas.
Business Plan Implementation Steps
Establish – Clear business objectives
Define – Assign the tasks required to attain the objectives set forth
Set – A reasonable timeframe
Monitor – Activities and Progress
Business Plan Implementation Objectives
Clearly and concisely set out the implementation objectives with the planning of strategic phases. Keep in mind your objectives at the same time ought to be realistic and demanding, but certainly achievable.
Tasks
List the tasks with identification of the individuals responsible for each task completion. State each task simply and clearly.
Timeframe
Frame each task and approximate duration within a clear and practical timeframe for completion, and be sure and clearly display all the activities necessary with their specific deadlines.
Monitoring Activity and Progress
Any delays need to be highlighted during the monitoring process. Rectification of identified delays is accomplished as an element of the monitoring process. You should also understand that within a business plan, there may be several implementation plans needed for the particular phases of the business including financial management, product planning, marketing, and human resource or personnel management.
Essential Elements of a Business Plan – First Five
Published December 27, 2011 | Planning is a course of action by which we can imagine and visualize the future, and then build and develop the essential procedures and operations to affect and achieve our envisioned future.
What are the Essential Elements or Sections that should be included in a Business Plan?
A good business plan generally has ten essential components. It is critical for you to provide comprehensive assessments for these individual components in attracting either lenders, investors, or both. Let’s take a look at the first five essential elements.
Executive Summary – The Executive Summary should provide a concise to the point summation of the business plan, along with highlights the main points within the body of the plan. The Executive Summary should communicate to any prospective investor the size and extent of the opportunity you have identified in the market, the endeavor’s business and profitability model, and how the management team of the company is uniquely qualified by resources, skills, and strategic positioning to successfully execute the plan. In short, the Executive Summary must be easy-to-read, yet compelling, and certainly no longer than 2-4 pages.
Company Analysis – This part should provide a tactical and strategic overview of the company, describing the organization of the company, products and services it offers or will offer, and delves into further detail specific to the unique qualifications of the business in serving the needs of its target market niches.
Industry Analysis – This part is an evaluation of the ‘playing field’ your business will be a part of and competing in, and should include clear thought through answers critical market specific questions including the next two components.
Customer Analysis – The Customer Analysis component is an assessment of the customer target market niche that the business serves. In this part, you must express the needs of its target customers, and then show how its products and or services meet the specific needs to an extent that the customer is satisfied enough to pay for them.
Competition Analysis – This part lays out the competitive landscape of your business. It should clearly identify who the direct and indirect (don’t forget indirect) competition is including assessments of their strengths and weaknesses and defines and describes your business’s competitive advantages.
Sparking, and winning an investor’s interest early is crucial. Therefore, the initial five sections of a business plan are almost beyond critical because most of the time, an investor won’t read or even scan through the whole plan. The market research and information that backs up the business opportunity’s potential, in addition to the background on the full business opportunity, are critical factors in gaining an investment.
Entrepreneurs that skillfully and comprehensively lay-out and present these components in their business plan really help themselves to deeply-comprehend and understand the business.
The Length of a Business Plan
Published December 26, 2011 | To be most effective is to do the right thing. To be efficient is to effectively plan and do it the right way.
Is there an Ideal Length for a Business Plan?
The ideal length of a business plan is subjective depending on its perspective. So, your business plan should range in length between 15 to 25 pages including the financials, a major component. From one perspective, the plan certainly needs to be short enough that investors can quickly read through it. From another, it has to be long enough to answer any important questions investor’s may have, and at the same time demonstrate your high-degree of understanding the business, the market, and business opportunity.
I frequently hear the question, “Does a business plan have an ideal length?”
It always reminds me of when I was about 6 years old and my father asked me how long I thought a person’s legs should be. Like a puzzled 6 year old at first, my simple, but well-contemplated answer was “long enough to reach the ground.” He liked that a whole lot and it stuck with me even to this day.
And I remember my answer in response to the business plan question, a business plan should be long enough to establish strategy, list important assumptions, confirm concrete metrics, list strategic steps including dates, tasks, responsibilities, and projected financial information including sales and cost of sales, expenses, funding, and cash flow.
It should contain enough detail to provide for practical and accurate tracking of results.
And to be honest, that doesn’t get measured in pages, and measuring business plans by page length is always highly-subjective. Yet, people regularly continue to ask that relatively important question, so I answer.
- The “classic” business plan finalized for presentation to outsiders including lenders and investors, shouldn’t normally take up more than 25 pages.
- An exception may well be business plan competitions that are becoming more and more popular and common.
You should always be extremely cautious in the use of “rules of thumb.” But, a great “rule of thumb” to apply here is, “The shorter, the better, only as long as you cover the information you need.”
Remember, form follows function. All business plans without exception, should thoroughly cover the main points, but in the end it’s all about business, not writing. So your business plan has to demonstrate maximum flexibility and adjust to the actual specific perspective and use.
Make Your Business Plan a Living Document
Published November 21, 2011 | Common Business Mistakes You Want to Avoid
What Happens Once You Write the Business Plan?
One of the most difficult tasks entrepreneurs and small business owners will ever face is writing a comprehensive plan for their respective businesses. That’s why many never complete the critical planning process, let alone attempt it, and that’s not good. But those that successfully complete the planning development also cultivate the strong realization that their business plan is a valuable reference.
The comprehensive business plan you create is one of the most valuable tools for operating the business you will ever have. Therefore you need to view the plan as a living document, take the time to maintain it, and it will remain an extremely valuable component of the pursuit of the greatest-level of success you set your sights on. The really good news is that once you’ve learned how to write a business plan, keeping it updated should be relatively easy.
Understand that as you continue the operations and growth of your business, it’s practically certain that you will make strategic changes to how you do business, make important decisions on new products or services you may want to offer, and just as importantly, which to discontinue. You might also change market strategies which may include distribution of your products or services, and continue to discover new methods and processes to improve your business operations and how you manage it.
There are important benefits to keeping your business plan current including (1) if you ever need to apply for additional funding through either sources of equity-based private funding, or debt-based lenders and directly related SBA loan programs, the more up-to-date your business information needs to be, and your updated plan should already be available. 
Time is money and because you are ready to submit your updated business plans, you’ll already have saved on both. (2) By maintaining your virtual-living plan, you force yourself to regularly re-examine the document, which in turn helps keep you clearly focused on what’s important to the success of your business.
How Often Should You Update Your Business Plan?
First of all, understand that depending on the nature of your business and the market conditions, you can update your business plan either 
(1) on a schedule, such as once every quarter or every six months, or (2) you can choose to update it on a virtual (real-time) basis, as changes occur.
Keeping plans updated in real-time is a new concept of understanding to many entrepreneurs and small business owners, and may seem like a nuisance, but it’s really the ideal method. Consider that it allows you to quickly act when you need additional funding, or if you need to sell your business, and by turning your plan into a more useful “business road map” it keeps you on top of business at all times. And that’s exactly where you need to be to greatly increase your business’ staying power and chances for success and growth, as your clear focused awareness makes even difficult tasks much easier, with an increase in successful results.