WHAT ARE THE BEST RESOURCES FOR WRITING A BUSINESS PLAN?

Business plans tend to get holes shot through them by partners, banks, parents, friends, and investors by one simple word “Why?” They are simply asking you why you are doing it this specific way, whatever this is, but this question has you stumbling over your words like a kid that was caught doing something wrong.

The first questions to ask yourself is why you are writing one in the first place. If it is only for yourself keep it short. If it is for partners or investors, dive deeper, but depending on your business, you do not need a 20–40 page document that spells out every detail of what you are going to do before you really have any exposure to the market. No one wants to read that anyways. Plans of that length usually tend to ramble on and show no real thought. Because you don’t know what you are doing, they are probably copy and pasted from ones that you think may sound good.

The key to a great business plan is knowledge, analysis, and true understand of everything you have written and everything that is between the lines. You have to have the research, analysis, and critical thinking behind that plan to provide real depth to anyone that actually needs to see a business plan and is going to be asking you a lot of questions about it.

I have spent a lot of time analyzing and putting together a process I have used as a Special Forces (SF) soldier to understand the battlespace or environment in which my my team was going to be operating. This includes all the threats (risk) to my team both by other entities in the area, but also the environment itself. Their lives may depend on what I know or what I don’t. Business is the same. Your business depends on this knowledge. Want to hedge your risk? Know what the hell you are doing.

Here are the basics of analysis I used in SF and have adapted for business:

1. Define the borders and domain of your operational environment. What is the area in which you will be operating? What is the desired end-state? What is your area of interest (any surrounding markets that will affect your market)? What domain will you be primarily operating in, physical or cyber? Define the concept of the business using the five interrogatives: Who? What? Where? When? Why?.

2. Define your operational environment. Determine the economic climate you will be attempting to build the business in and whether that is an advantage or disadvantage. Other questions that you will be answering are: What is the product market in which you are attempting to enter? What is the geographic market or cyber market you will be engaged in? How do people find out about products or services like yours? Who is your ideal customer (stereotype)? What do they like and dislike? Create a mental image of that customer and stereotype the hell out of them? Think of it this way, what type of people get coffee at Starbucks? What type of people shop at Whole Foods? Do the same thing with your business idea. What are the unwritten rules of that market? What type of infrastructure is available to you (physical and human)?

3. Describe environmental effects on operations. How does everything from Step 1 &2 affect you, your business, and your launch (good or bad)? What are the second and third order effects of all of the factors you researched? What is the future of your market based upon the factors above?

4. Evaluate the Threat/Adversary. Who are you competing against? Part of that might even be lack of awareness in the marketplace? Who is filling that awareness right now that you need to target? Even if there is no obvious competitor, there are always other companies and people trying to influence your market and capture the attention and money of the people you would like to sell to, potentially within your area of interest (closely tied markets). How are the competitors marketing? How are they reaching their customers? What are the vulnerabilities with this and other aspects of their business; what’s the competitors missing that you can capitalize on?

5. Determine Threat courses of action. Formulate what you think every competitor will do right now, in the near future and when they notice you enter the market. Are they in the process of a pivot because they see the writing on the wall for some disruption? How innovative are they? Will they continue business as usual or will they actively target your customers? If they will target your customers, how? How will they reach them and what will they do to win? It’s all about winning customers.

6. Assess capabilities and weaknesses of yourself and your allies. Who the hell are you? What will make you successful in this? You HAVE TO ANSWER THAT! What could lead to your failure and how can you mitigate that? Develop an honest assessment of where you are. What aspects of the business you should handle and what you should hire someone to do for you, your ally. This part may hurt, but if you can’t do this honestly, you will have a much harder time down the road when problems due arise. Most of these problems will arise due to the fact that you thought you could handle something that you couldn’t.

7. Assess and analyze your critical assumptions. Throughout the planning process you will have to make some assumptions. That is good. This is where you take a good hard look at them and determine how critical those assumptions are to your success. Focus more research on these. What I mean by this is if you have assumed that no competitor has a product like yours in the works, but what if they do? Is that critical to know? Concentrate on the things that could put you out of business if your assumptions are wrong in the future. Your goal is to confirm or deny these.

8. Develop Contingencies – These may be based on your assumptions. Follow Murphy’s Law here, “anything that can go wrong, will go wrong.” Write down everything that you can thing of that could go wrong along the process of opening the business and your first couple years of operation. This could be that the real estate you have picked has the contract fall through for any number of reasons.

9. Move forward. This means organize all these thoughts and write this all down. Basically, you are writing your business plan. All investors, and maybe customers, will want some sort of plan with the knowledge behind it to answer any questions from the top of your head. More importantly though it will give you the confidence to move forward, especially when it gets tough because you truly believe. It will be much harder to build doubt in you if you have gotten this far and still believe. Even more powerful though is when this research uncovers more weakness in the market that you will be filling and you can build that into your plan!

Now that you have that complete, apply all that knowledge to the basics of what every business does:

1. What are you going to bring to market?
2. What is the problem you solve for customers? (need or desire)
3. How much will you charge for it (fair price) and why?
4. How will you get it to your customers?
5. What will you do and how to be profitable?

The plan you create can be short but the knowledge behind it will bring confidence to anyone that you know what you are doing with clear direction and confidence. If they need to see your business plan, you better know everything about it.

There is so much more to it. I am writing a book on this subject to give people a real model to follow. Hope this helps,

Sterling