How To Make A  Business Plan Outline That Works
- Articles, Blog

How To Make A Business Plan Outline That Works


Hi folks, Dave Waring here from Fitsmallbusiness.com
and today’s lesson of the day. In our last lesson we continued our series on how to start
a successful business with a look at how to know if you need a patent or trademark for
your business. In today’s video we are going to continue that series with a look at how
to write a business plan outline. Do you need a business plan? Over the last several years there has been
a growing debate about whether or not a business plan is a waste of time. Those on the no business
plan side of the argument, which is being lead by UC Berkley’s Steve Blank argue that
the time spent writing a business plan is better spent out talking to customers about
the product or service you plan on developing. As we talk about in our video on how to test
your business idea, we agree that you need to go out and talk to people about your business
to make sure there is demand before you build it. However, we still think a business plan
is also a valuable part of the success equation when starting a new business. Let’s look at the components of a successful
business plan. If you are writing your business plan for
yourself and staff, then we do not recommend doing anything super extensive. A better approach
is to put together a short and to the point presentation using powerpoint or keynote.
This is also the format that many venture capitalists like to be pitched with, so this
format will often work for that as well. If you are going to need a more extensive plan
this is still a good place to start, and we discuss how you can expand out on it later
in this video. The format we are using is taken from the
writing a business plan page of Sequoia Capital, a well known venture capital firm. Company purpose Coming up with a simple explanation of what
your company does is essential to selling your business to your future customers and
others. This should be one sentence. Here is an example from Airbnb a website where
people can rent rooms out in their apartment or homes to travelers on a short term basis. “We connect people who have space to spare
with people who are looking for a place to stay”. Problem If you have watched our video on how to come
up with a business idea, you know that the biggest mistake that new entrepreneurs make
is starting a business that solves a problem no one has. In this section list the problem
that your company solves along with examples of how people are currently dealing with the
issue. AirBNB Example: People have space they want
to rent to others for short periods of time but no good way to rent it. How did people deal with this issue before
airbnb? They would either not rent out the space at all (missing out on that potential
revenue) or they would use fragmented sources like word of mouth or Craigslist. Keep in mind that it doesn’t have to be a
major world issue, if your city doesn’t have a good mexican restaurant then that may be
a problem as well. Solution: As we also outline in our article on how to
come up with a business idea, the best businesses provide good solutions to problems that people
have. airbnb example: They provide an online platform
which facilitates the connection between people with space to rent and people who want to
rent it. They make the process smooth by handling the payments, providing insurance to the rentee,
and providing reviews of users to both the rentee and the renter. Here you can also provide use cases if you
are a service or screenshots if it is a product. Why Now? Describe how the company got to where it is
today. This is where you could include how you came up with the business idea, and what
you found when you tested your idea. What recent trends make your idea possible?
For Airbnb one such trend was likely people’s increasing comfort with relying on online
reviews and making purchases online. Who is your target customer? Describe your target customer based on personality
type, income level, age, gender etc. How big is that market? For more on how to
calculate the size of a market read the article 8 Steps to determining market size from insight
central which I have included in the resources link under this video. Competition Who are your primary competitors and what
are your competitive advantages? List out the primary features of your competitors
product or service and how your product or service is better or different. A table format
such as this one generally works well for this. Product What is your product or service and how do
you plan on developing it? In the problems and solutions slides we talk about above,
you are listing the benefits of your product or service to the end user. In this section
you are talking about specific features. Give the timing for each phase of the development
process through launch. Business Model This section should answer the following questions. Revenue Model How do you plan to price your product and
what will your profit margins be? For more on how to price your product or service read
the pricing guide from Elizabeth Wasserman at Inc.com which I have included in the resources
link below this video. Distribution Model How do you plan to sell your product? Are
you going to sell directly to customers, wholesale or go through distributors? For an in depth overview of sales and distribution
strategies see the guide the guide from Shorey Consulting which I have included in the resources
link. For more on online sales and distribution models see the guide from Yeoman Technologies
which I have also included. Marketing Model How do you plan on getting the word out about
your product or service? Jessica from Shoestringmarketing.com offers
a great 60 page guide about how to market your product or service on a budget, which
you can download in exchange for your email. I have included a link where you can get that
in the resources link below this video. Team Who is on your team, why are they rockstars,
and who is responsible for what. If you have outside advisors include them here. Financials This is where you try and predict your monthly
revenues and expenses and how those will grow over time. Focus on the next 12 months. Founders almost always underestimate how long
it is going to take to reach profitability and how much money they are going to need
to fund their business. While its the job of a company founder to be optimistic, it’s
important for this part of the plan that you are realistic. For a great layment’s overview of how to put
together your business plan financials see the 3 video series by the founder of Palo
Alto Software and Bplans.com Tim Berry which I have included in the resources link below
this video. How to Expand Your Business Plan When Needed After going through the above process you
should have somewhere between 15 and 20 slides giving you a solid overview of your business
and how it will be run. If you are planning to raise money then for some sources (such
as friends, family, and certain venture capitalists) this may be enough. If you plan on trying to get a loan from a
bank then what we outline above is a good start but you are likely going to need to
have a written plan to go along with it. For this we recommend the business planning software
by LivePlan which you can find on in the resources link below this video. If you prefer to go the free route then I
have included some templates from the folks over at SCORE.com in the resources link, as
well as some other great resources for setting up your business plan. That’s our Video for today. If you have any
comments or questions please leave them in the comments section below. Also be sure to
see the next video in our series on how to start a business which covers how to raise
money for your business.

About Ralph Robinson

Read All Posts By Ralph Robinson

11 thoughts on “How To Make A Business Plan Outline That Works

  1. Thanks for the compliment Johnathon if you have any questions as you go through the series let us know! Best Regards, Dave

  2. Hi Carolee, Entrepreneur has some great free templates which you can find here by searching google for "Entrepreneur + Business Plans" Hope that helps, if you have any other questions let us know! Best Regards, Dave

  3. My Pleasure Lacresha if you have any questions as you go through this or any of our other videos let us know and we are happy to help! Best Regards, Dave

  4. Thank you so much for this! I love that you went beyond the business plan into the rudimentary proposal stages. This video really helped me realize how to succinctly state my new business' purpose. 

  5. Thanks for sharing this tutorial. I think that many people will find it very helpful, Are there any good articles on this topic?

Leave a Reply

Your email address will not be published. Required fields are marked *