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Lately I’ve been rethinking business plans. On the one hand, in the consulting and academic world, what is meant by a business plan is a fairly comprehensive research project with thorough analysis of issues including customers, markets, competitors, pricing, marketing strategies, risks – always followed with detailed multi-paged financial projections looking three to five years into the future. To create this kind of a plan, management works on it for months, or hires a consultant to do it for them. Either way, it’s not unusual to invest a hundred hours or more into creating it.
On the other hand, in most of the business world, what is generally meant by a business plan is a brief written statement indicating goals and overall steps for achieving those goals. The goals might relate to customers, sales, units sold, profits, facilities. It looks out a year, maybe two. This is something the owner or management puts together in a few meetings, when then gets updated every year or two.
These are two very different meanings of the term business plan, and I’m beginning to wonder if both are missing the mark. The comprehensive plan isn’t all that practical for small businesses or nonprofits that lack the time or dollars to do all that work, however valuable it might be to do so. And the brief plan can be very superficial to the point that it does little more than set ambitious goals with minimal guidance on what to do when the business encounters those pesky potholes in the road.
So here’s my idea for a third kind of plan, taking the best of both worlds. For now I’m calling it the Five Page Business Plan. Keep it short and simple, but still useful. It involves doing “just enough” research and analysis into “just the right areas” that will matter for achieving success with this business. Summarize all that in three pages of text, then a page of financial projections and a page about the expertise of the management team and the facilities and key equipment that will be utilized.
Can this offer the best of both worlds? It just might. Will it attract investors? I don’t know, but I do know they’re more likely to read it than the 38 page variety. When I get the chance, I’m going to convert some of the comprehensive plans I’ve written over the years into that format. The idea is to see if it’s possible to get into five pages all that is really important in a business plan. I think it can be done.
What do you think?
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For more resources, see our Library topic Business Planning.
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Author of Venture Forth! Endorsed by the late Paul Newman of Newman’s Own
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