As I’ve mentioned in this space before, I did not write a business plan when I started my business. One of my strengths is also one of my weaknesses: I am terribly impatient. I like to do; I do not hem, haw, and stall. From my point of view, writing a traditional business plan is a total waste of time for small business people like me. I am a one-woman shop, registered as a sole proprietor, and happy to stay small for the time being. Traditional business plans are for companies that need a lot of financing, are highly scalable, and entering a competitive—or soon to be competitive—marketplace.
(Before you start posting comments about the importance of having some kind of plan in place, keep reading. I do agree that it is absolutely important to articulate your business goals, the competitive advantage of your product(s) or service(s), and your sales and marketing strategy. I will even admit that I wish I had done two things when starting out: researched my competition so that I priced my services appropriately from the get-go, and really thought about which industries I’d prefer to work with and which projects I enjoyed writing and editing the most so that I could build up expertise faster in those areas.)
The always provocative Seth Godin recently wrote a great blog post on a modern business plan. He argues that traditional business plans are boring and simply demonstrate the ability to do as expected. His business plan would include only five sections: Truth, Assertions, Alternatives, People, and Money. Based on his outline, I think his idea of what constitutes a good business plan would be much more useful for people starting and running small businesses. Seth’s modern business plan really gets you thinking about how to be an entrepreneur and create something new and of great value, rather than just a small business owner who is doing something that’s already being done.
Truth: This part lays out the way your industry operates, for good and for bad, right now. What needs are there, who are your competitors, how have they succeeded and failed? Include short case studies or stories, spreadsheets, charts, graphs, whatever it takes to illustrate your point(s).
Assertions: As Seth describes it, this is the heart of all business plans, because this part describes what you’re going to do and how that is going to change things.
Alternatives: Because everything we hope to do doesn’t always work out, this section describes your back-up plans.
People: No resumes here. Write what characteristics you and your team possess to ensure things keep moving forward when things are going well and when things are not going well.
Money: This section is exactly what it sounds like. It’s the part that puts me to sleep, but it is vitally important to know how much money you need to be viable and how you plan on spending it.
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Tags: Business Plans, competitive advantage, Entrepreneurs, Seth Godin, small businesses
Posted in Entrepreneurs, small business, Thought Leadership | 4 Comments »
