Do I need a business plan?

 

Over the past few weeks I have had several friends and colleagues tell me that someone told them, “You need a business plan!” It got me thinking – does every business need a business plan? Don’t get me wrong – I have had to write two detailed business plans to be awarded $20,000 in business loans, so I know that in certain situations they are critical. But to be honest, neither of the business plans I wrote for those purposes really guided me in building my business.

So why were they not useful? To start, both plans were HUGE. And while both plans showed the financial institutions I was working with that I had done my homework, my plans never really provided a road map for ME to take action in my business. And that was what I really needed – a road map forward.

What is the difference between a business plan and a business road map?

A business plan tends to be a large document that shows you have done your research. The plan proves that you know your market, including your competitors and your strategic position. It gives a sense of how you will differentiate yourself, how you will market your services, and you have a good sense of how much money you need to make to break even, and to turn a profit. It details the operational plan – who will do what. A comprehensive business plan can even show how the business will grow, develop and change over the first three to five years. It proves to some external source that you have thought things through, and you are a reasonable risk.

A business plan is usually written to convince someone else that you know your business.

A business road map is written for YOU.

A road map needs some similar elements to a plan. It is helpful to be able to clearly articulate who your target market is, how much you need to make, how you will market yourself, and what you consider markers of success along the way. The big difference is that it is written for you as an action plan for staying on course.

Let me give you a quick example: Sarah has a business plan that shows she needs to make $1200 per month to cover all her business expenses. She has calculated she need 12 clients per month in order to cover her expenses. However, Sarah has in her business road map that she needs to make $1000 per month take home pay to cover her personal costs. She now knows that she needs 22 clients per month in order to be successfully running her business and supporting herself.

So what are the key elements of a good business road map?

  • Your “WHY”
  • Who you serve (Target Market)
  • What you offer (Goods/Services Description & Differentiation)
  • How you will reach your market (Marketing & Sales)
  • How you do what you do consistently (Operations & Business Systems)
  • How much you need to generate in revenue to sustain your business and sustain yourself (Financials)
  • How you measure success (Key Performance Indicators)
  • Your 90-day[1] action plan with success measures (Action Plan)

These elements can be described in as little as 10 pages, and can easily be reviewed regularly. A business road map should be a living document that grows and changes as you and your business mature.

Not sure what it takes to start building your business road map? Download my Road Map Summary Sheet and then call me for a complimentary Discovery Session and we can talk about creating your personalized business road map for success.

[1] Your action plan can be shorter or longer depending on what works for you.

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