Writing A Business Plan That Works As Hard As Your Company Does

[#1]

When it comes to writing business plans I learned the ropes the old-fashioned way: my choices were to either write a successful business plan or find a new job. During the dot-com era, I was the sixth employee hired by a promising Swiss startup. I was employee number six, hired to head up marketing and communications.

Day two on the job, I was informed that we were going to run out of funding in about 4 months. As the only employee fluent in written English, my job description immediately expanded to include writing a business plan that would raise enough venture capital to keep us in business beyond December. It was…daunting.

It was also a huge learning experience, and today, years later (and 30 million Swiss Francs of funding raised), I’m going to share a few of lessons I learned.

First, be brutally honest with yourself about what your company goals and objectives really are. A great starting point for me was to revert to Journalism 101and envision my plan in terms of the five w’s – who, what, where, why and when – and the one h, how. Using this exercise to organize your thoughts about your business is helpful even if you’re not tasked with writing a plan.

Another lesson I learned, also applicable across a wide spectrum of business situations, is to respect and acknowledge what you do not know. The story of your business needs to be told in a compelling fashion that showcases your unique value in the market but also remains grounded in the reality of the business world of P&L’s. I knew I could put together a business case with words, but I needed a financial wizard to crunch the numbers and answer the tough financial questions that investors would ask. We hired a CFO a week later.

Depending on the level of funding you’re seeking, financial data can include P&L information, sales forecasts, cash flow data and a firm and clear plan on how you intend to pay back loans. Your plan also needs to include an in-depth competitive analysis to quantify your company’s market penetration and market opportunities.

Here’s the tricky part. You run a business that you cherish. You are involved, and passionately so, in every aspect of it. And yet, this is a good time to let go and hand some of the heavy lifting over to the pros. At my startup, we made a considerable investment in competitive analysis, which paid off.. A friend, on the other hand, did not; he’s one of the most phenomenal bakers in his city, but kneading the dough and expanding a business nationwide are two different things.  Instead of investing in outside help, he tried to manage it on his own. But, like many of us, amortizing expenses and organizing and presenting financial data is not his strong suit. Again, know when to let go. 

Finally, make peace with the fact that your business plan is never complete. Like your company’s resume, it needs to be ready to be presented at a moment’s notice, and it needs to be current. At my startup, we went back and revised and updated the plan every time anything, large or small, changed.

Ready to get started? Be sure to visit the recently launched HP Startup Central.. The site offers easy access to resources you’ll find invaluable whether you’re just getting started, or growing your business or preparing for funding. In addition, Google  offers a range of sample plans and software, the Small Business Administration provides templates and other resources and the Service Corps of Retired Executives, or SCORE, provides not only business plan templates but offers mentoring for the process as well.