Updating the Classic Business Plan

rahul_parab2006

rahul_parab2006

Rahul Parab
Updating the Classic Business Plan

By Sean Silverthorne


What makes a great business plan? Powerful PowerPoints? Pivoting Spreadsheets?

According to Harvard Business School professor William Sahlman, who wrote a classic work on business plans, it all comes down to one thing: People. Says Sahlman in an interview with yours truly on HBS Working Knowledge:

“When there is great uncertainty in the market, investors become quite risk averse. They will only back proven entrepreneurs with truly compelling ideas. People make the numbers, not conversely. So, I still think the people making the forecasts are more important than the numbers themselves.”

Some more tips for business plan writers:

Short and Simple. “I have seen compelling business plans in the form of a few PowerPoint slides, a couple of scribbled pages, and a brief video,” Sahlman says. “What matters is having all the required ingredients (or a road map for getting them), not the exact form of communication.”

Encourage Investment From Customers. The best money comes from potential customers, not venture capitalists.

Tough Times Present Opportunities. Yes, this is a difficult environment for start-ups, but it also likely means you will have fewer competitors competing for resources.

Think Global. “We live in a world of democratized access to ideas, human capital, and mone,” Sahlman says. “There are fabulous global ventures being started in every corner of the globe. These ventures can raise money locally or globally. They can disperse talent in many countries.”
 
BUSINESS PLAN TEMPLATE

Business Plans, like Résumé’s and dozens of templates can be found on-line, however despite the variety of formats a business plan’s content is consistently the same. The business plan consists of a narrative and several financial spreadsheets. The narrative template is the body of the business plan. A good business plan should include:

• a description of your business,
• the business and owner’s background information,
• the proposed resources to be used,
• the business strategy
• trends on your business and the industry it will operate within,
• how your business will operate,
• who will manage and work within it,
• what other businesses operate in the same market/industry,
• how you will market/ sell your product or service,
• the results expected and finally
• a summary of it’s feasibility.

The real value of doing a business plan is not having the finished product, but the process of research and thinking about your business in a systematic way. The act of planning helps you to think things through thoroughly, study and research when you are not sure of the facts, and look at your ideas critically. A business plan will help you clarify your goals and focus on defining every detail of your business opportunity. It takes time now, but avoids costly mistakes later. This business plan template is designed to be very user friendly and has been used successfully by thousands of aboriginals in BC who have been financed and funded to start their businesses. A business plan should be organized, complete and factual.

It typically takes several weeks to complete a good plan. Most of that time is spent in research and re-thinking your ideas and assumptions. But then, that is the value of the process. So make time to do the job properly. Those who do, never regret the effort. There are 4 components to any business plan:

1. The Plan
The first step in writing a business plan is the body of the business plan, which starts on page 7. You should read through this template, but do not start writing at the beginning. It is much easier to write a number of small essays that form the various aspects that are contained in a business plan.
 
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