- Most business plan templates are best for large, established businesses
- Why business plans are flawed.
- Why a startup or MSP ownership business plan is different
- Also, where are you, the MSP owner, in the standard business plan template
- So, what should be in a business plan template?
- Why you need a business plan
- What makes an excellent Business Plan
- Where can I find traditional business plan templates
- Related posts
When I started a business right out of college, one of the critical pieces of advice someone gave me was to draft a business plan. The idea was to use the plan to identify the different components of my business, how I would compete in the market and what I would do.
It was a complete waste of time.
Maybe you can relate.
I have created many business plans since then, and most were a waste of time – until I figured out I was doing it wrong. I was focusing on the wrong things.
Most business plan templates are best for large, established businesses
If you do a Google search for a business plan template, you will find dozens of variations on the same theme. Wrapped in different language and slightly different words, you will find a list that looks something like this:
- Executive summary
- Company description
- The products and Services you offer.
- Marketing plan (how you will sell)
- Competitive summary
- Operations plan
- Management and organization (how you structure the company)
- Startup expenses and how you will get the money.
- Financial plan
- And lots of appendices supporting all the assumptions you made above.
There is nothing wrong with these categories; they are correct, and understanding them is useful; the only problem is that they don’t help you build a business.
There are a number of sample business plan templates that will guide you through crafting your traditional business plan, the SBA has good advice here, and Live Plan offers a great tool you can use to build your plan.
Why business plans are flawed.
We thought deeply about these categories when I worked for a large company. We developed one and five-year business plans that outlined each one.
But we also had $500 million in revenue, faced stiff competition, and had to develop new strategies and technologies.
We had to choose between different investment opportunities and justify our choices with robust analysis. We had the financial ability, the investors, and the human resources to make our plans a reality.
All new ventures and most small businesses, say up to $25-30 million in revenue, do not face the same challenges that a large business faces. So, their plan should be different.
When searching for a business plan template, the business plan templates you will find are based on the needs of a successful, established business, not the needs of a growing startup.
Why a startup or MSP ownership business plan is different
When starting or growing a small business, the MSP owners must standardize and build the business machine.
You must get crystal clear about the product you deliver (even your service should be a product) and to whom. It is essential to establish the glue of the company, the vision, mission, and values so that you can start to build a team.
The success of a small business depends heavily on the MSP owner’s ability to create standard ways of delivering your product and ensuring that the business works without you, the MSP owner, having to dictate every step in the process.
Also, where are you, the MSP owner, in the standard business plan template
If you are building a business, it must align with your needs and desires. You should be clear about what you want and the business’s role in helping you achieve what you want.
In our program, we ask people to write a prosperity plan that defines the impact, freedom, and wealth goals they want to attain. If you and your business are not aligned, building it is likely to turn into an energy-sucking exercise rather than a life-affirming one.
In addition, you, the business owner, are the biggest wildcard in growing your business. Your mindset will enable or limit it, your idea that will form its basis, and your passion that will ignite the rest of your team.
The standard template leaves you out of the business. We think that is a mistake and suggest that there are other types of business plans for growing businesses.
So, what should be in a business plan template?
Our business plan template includes these seven elements:
- The business definition: this includes all the stuff in the traditional business plan but goes a bit further. We suggest you look at the nine elements of a business model (Value proposition, how you attract customers, how you relate to customers, your sources of revenue, your key activities, your key resources, your partners, and sources of cost).
But we also want you to think about your vision, mission, and values because these are essential to growing your team and the business.
- The processes you need to deliver. How will you attract, convert, deliver and complete your business activities? Make this repeatable.
- The factory, what is all the stuff you need to run your business and make it work?
- You, what you want out of the business; your impact, freedom, and wealth goals. It is also important to think through how you keep yourself accountable and how you will overcome the mindset challenges that we ALL face.
- People, or your team, and how you will build a team, engage them, and ensure they are all working toward the same goal.
- Metrics and money so that you can measure your performance and plan your finances.
- Invention, because you will always face hurdles, and it is in overcoming these hurdles that you develop the intellectual property that sets you apart.
In our experience, the process of thinking through these seven areas is essential to building a successful business.
Why you need a business plan
Now, in opposition to the “follow a traditional plan” camp, there is the “you don’t need a business plan” camp.
But you do need a plan.
First, writing a business plan is a valuable exercise: it allows you to think through how you will build your business, what it will look like and what your priorities are. The practice of thinking, imagining, and visualizing your business is important.
More importantly, a business plan keeps you on track and supports you in delivering meaningful results.
Research conducted by Bplans.com suggests that businesses with a business plan:
- Grow 30% faster than those without.
- Are twice as likely to grow, secure finance, and woo investors.
- Are 129% more likely to grow beyond the startup phase and 260% more likely to develop from idea to new business.
These statistics sound reasonable to us, though our experience suggests that a business plan is even more critical than they suggest (though we don’t have supporting statistics).
Almost always, when we start working with a business, they are struggling to grow, the owners are underpaid and overworked, and the team is not aligned. These businesses also never have a workable business plan.
What makes an excellent Business Plan
This is what Investopedia says makes an excellent business plan:
Good business plans should include an executive summary and sections on products and services, marketing strategy and analysis, financial planning, and a budget.Investopedia
Here’s what we say:
Your business plan doesn’t need an executive summary, we don’t care. What it needs is a clear plan that you can follow to help you grow your business.
An excellent business plan defines where your business is, where you want it to go, and gives you a pathway to get there. An excellent business plan serves you and helps you build your business.
Where can I find traditional business plan templates
There are good ones out there, the SBA has a nice overview of a traditional business plan and how to use it, they also have examples. You can find the SBA’s Business Plan template here.
Score also has a good template which you can find here. Score is a great organization, but most of its advisors are retired corporate executives who never built a business. Their advice is well-meaning, but generally not tailored to the needs of small, growing businesses.