We see a lot of requests for business plans and business planning support, so we wanted to cover some basic information about business planning.
What is a Business Plan?
A business plan is usually a living document that outlines every aspect of your business and serves as a guide for the execution of your business.
It’s important to regard your business plan as a living document. Things happen constantly and rapidly, especially in the tech-forward industries that we typically research, so you’ll want to regularly update your business plan and adapt to changes in your industry.
Your business plan will contain detailed information about the nature of your venture, including:
- your ideal customer(s) and how your business interacts with them
- your product/service and how it meets the needs of your ideal customer(s)
- the market that your business is/will be in
- the competition that your business will face
- the strategies that you’ll use in the operation of your business
The detailed information in your business plan will guide your business as you operate and grow it.
The business plan’s trait as a guide for your business is pretty universal, but another common use for business plans is to aid in raising capital for the business. We’ve seen entrepreneurs seeking to develop or refine their business plans for the purposes of raising a seed round of capital.
When used for raising capital, the information in your business plan serves as a presentation of your business to investors, who will consider the information in your business plan when making a decision to lend capital.
With your business plan being a living, comprehensive plan of the execution of your business strategies, and containing a lot of detailed information, you likely won’t lead with the full plan as the presentation of your business to investors. Instead, you’ll probably condense the information in your plan into a pitch deck, optimally 15-20 slides that communicate the strength of your business plan, and inspire enough confidence in your potential investors that they’ll lend you money to fuel the growth of your business.
With this shift in audience from your own business leaders/stakeholders to potential external investors, some information in your business plan will become more important for your pitch deck. For instance, DocSend’s study on startup funding identifies financial information as the most viewed information of a pitch deck, when the financial information is included.
For Existing Companies
Business plans aren’t only for new businesses. Some business leaders want a business plan to guide the launch and/or execution of a new division of an existing company, or maybe a new program within their company.
When creating a business plan for an existing business, there is a different shift in audience. If you’re the leader of a division in your company, you may want the plan as a guide for growth of the division, so your colleagues that lead the division will be a part of the target audience for your business plan.
Another part of the target audience of your business plan in the case of a division of an existing business are the leaders/stakeholders of the parent company. This can be challenging, because your audience can range from company officers, to outside investors, to board members. But knowing your target audience is an important factor in developing a successful business plan.
Do you need help with developing a business plan? Here are some tips:
Try starting with a Business Model Canvas
A business model canvas is a condensed, visual version of a business plan. It’s great for getting you thinking about the pieces of the business plan, without having to produce the whole plan beforehand.
Learn from Others
We gave this advice when talking about how to scale a startup, and we give it again. Make sure you exhaust the free online and offline resources you have access to, in order to learn as much as you can from others, including:
- Sample business plans
- Local meetups/communities
Shameless plug: contact us here if you have any questions about business planning. We go beyond the basics to employ and discover strategies that will give you a competitive edge.