If you don't have a map, how do you know if you're going in the right direction? The same can be said for business plans. If you don't have a business plan, you could find yourself on the road to Nowhere, or worse the road to Bustville. Many entrepreneurs that I have met have this misconception that business plans are only for those seeking venture capital or bank finance. Although they are correct to some extent; those seeking VC or loans need business plans, that's still no excuse for not having one for your business.

But where do you start? It's the first objection I hear. It's a valid question; it's not like they taught us Business Planning 101 in highschool (perhaps they should have). A business plan is a daunting task, and it is not one to be taken lightly. A business plan should serve as a vehicle to get your ideas out of your head and onto paper. Not only that, it should serve an operations manual for running your business. It should be reviewed and updated annually in light of changed circumstances; this is what I call a living business plan.

There are so many different formats for a business plan and I am yet to find a definitive standard. From my experience in business plans I can boil a business plan into five core components:

  • Business Background: What is your business about? What are your goals?
  • Operational Plan: How are going to run it? Who's going to be involved?
  • Strategic Plan: How are you going to achieve your goals?
  • Marketing Strategy: Who's your customer? How will you communicate with them?
  • Financial Statements: How will it be financed? What kind of profit are you expecting?

I won't go into too much more depth now (I'll save that later), I just wanted to plant the seed in your head so you can start thinking about getting your business plan sorted.