Business plans: better done than perfect
Learning how to write an effective business plan is an essential first step for any entrepreneur. Ben Haber presents the top tips he's picked up whilst being an On Purpose associate.
Business plans are vitally important, but you’ll never feel that you’ve got them exactly right and you’ll never be totally happy with them. However, it’s always better to have one done rather than continually changing it trying to get it ‘perfect’. Whether you’re applying for a grant, investment or a loan you need to be able to demonstrate why the money should go to you and not to someone else. A business plan is the ideal vehicle for achieving this.
Writing one can be daunting. A business plan provides innumerable opportunities for questioning, tinkering and re-writing. Beware of endlessly editing and updating the formatting of your text, because you’re just procrastinating.
Focus on why you’re writing the plan and who your audience is. With this clear in your mind, writing a business plan is as simple as answering the following questions;
- What will you do? What does the world that you’re trying to create look like? What’s your mission and what are the activities that you’re planning to undertake? This includes stating what you won’t do.
- Why should you do it in particular? What are the problems that you’re trying to solve and do they need solving?
- How will you deliver it? What relevant skills or experience do you have? Clearly show your timelines, a Gantt chart can be useful.
- What are the financials? A business plan is a story told with numbers. You need to understand them and be able to explain and support them.
- What are the risks? Risk management is a whole career in itself. The main thing to remember is that you need to show that you’ve critically reviewed your business, understood what the risks are and know how to deal with them.
- How will you evaluate it? Define your theory of change. Then use it. A theory of change isn’t just a theoretical exercise or a chore that your investor makes you perform. It’s a useful decision making tool that you can judge your progress against.
With these questions answered and your spreadsheets complete, you cannot underestimate a person’s desire to find a shortcut. As a result, most people will only read your executive summary. With this in mind, these are a few top tips:
- Keep it short and sweet
- Make it understandable
- You’ll know it through and through, but remember that your audience may not know anything about it and definitely won’t know any jargon.
- Make it self-contained. It’s the only thing they’re reading.
- Include financials and targets
- Sell (but don’t over-sell) the idea. The plan needs to do most of the selling for you; you should just give it a little helping hand.
- Make it look attractive. People are going to need to want to pick it up.
When all is said and done, people will pick holes and you won’t know some of the answers, but if you know most, that’ll be enough.
Ben Haber is one of the speakers at the first NatWest SE100 Social Business Club and Insight event of 2016 on Wednesday 23rd March. The event will launch the SE100 Social Business Club, which aims to support leaders and managers of social ventures across the UK to learn, network and thrive together, and is free for SE100 members. Click here to find out more.