Three Special Business Plan Types : Though it has undergone many changes, the business plan is still around. No longer limited to the traditional 12-15 page type-written document, a business plan can be exciting and engaging as well as useful. Many of us realize that it’s the planning process, and the associated research and soul searching, that is so valuable. The finished plan is just icing on the cake.
Just as there are many types of entrepreneurs and business ideas there are many kinds of business plans. Here are three that deserve some special attention.
The “Accidental Entrepreneur” Plan:
Believe it or not, it happens quite often. An impulse, a hobby, or a passing notification turns into a business without warning. One day you’re handing your extra back-yard tomatoes or homemade cake to the neighbors, and before you know it you’re filling out the forms for a booth at the local farmer’s market. Perhaps you create a unique bit of hand-crafted jewelry and wear it to school or work, and then find your phone flooded with messages like, “Where can I get one?” and “I’ll pay you to make one for me.”
When you’re writing a business plan in a situation like these, you need to address a few issues the intentional entrepreneur has already pondered. The first is do you really want this idea to become a full-blown business? Certainly it’s flattering when you realize there’s a market value for something you were doing anyway, but that doesn’t always mean you should launch a business. A lot of accidental businesses form around fads or seasonal items, and may not be robust enough to function as year-round, money-making, enterprises.
Next you will need to carefully examine what actually goes into your offering. How many hours does it take to create those one-of-a-kind bracelets? How much does it cost to bake a dozen of your special recipe cookies? How much research goes into “whipping up” a website? Making tangible goods requires space. Do you have room to grow enough squash to actually generate profits? Are these numbers you could sustain beyond the occasional personal or family use of your product or service?
The business planning process can be very helpful to “accidental entrepreneurs” as it allows you to decide which ideas are best left as hobbies and which ones could provide some real cash flow.
The “Back of a Napkin” Plan:
It is the source of entrepreneurial legend and lore, the million-dollar idea that was hurriedly scribbled on a bar napkin. Yet, for most potential business owners this option for business planning remains a fantasy. However, like any myth there is a tiny grain of truth inside. A quickie business outline can work as a launch plan under the right circumstances.
If you need to get going quickly to ride the wave of a fad before it fizzles, then fast, bare-bones planning may be all you’ve got time to execute. This works best when you’ve already got the infrastructure in place, perhaps from previous projects or an established business, and you can simply shift energy and resources to the new idea.
When you, and your partners if any, have all the core skills and industry knowledge you need to start right away without seeking experts, napkin notes may be enough to get going. Let’s say you are already an expert in technology and social media. Then you, and your team, probably don’t need a detailed plan to start developing a new app. You will draw on your knowledge and experience, and you understand that you might need to go back and do some more detailed and formal planning later.
Certainly when you reach the point where you are looking for investors or lenders, you will move beyond those first casual notes. Until then, drawing upon your expertise can allow you to quickly jump into the market and perhaps gain a competitive edge by using a minimalist plan.
The “One Pressing Issue” Plan:
Business planning doesn’t stop the day you open a business. In the best of circumstances, you should review your plans once or twice a year to see how things are going, and where you may have strayed far from your original goals. Remember, changing the direction of a business is not always a bad thing, but it should be intentional.
Then there are times when something seems off, when one or more areas of the business don’t seem to be working. Cash flow is sluggish or the marketing message is flat. Perhaps the customer has shown a real interest in only one particular product or service, ignoring all of your other offerings. This means it’s time to review your business plan, rather it’s time to review the inquiry process that helped you structure your plan.
Look at the assumptions you put into your original plan. Is the city following up on the opening of a new park across from your location? Are insurance rates what you expected? How many hours of accounting or web design help do you really need? Do your online inquiries outweigh your face-to-face sales? Or vice versa?
Sometimes no matter how much you research, plan, or test, things don’t go as expected in business. This is not necessarily a sign of failure or a sign that you are not cut out for entrepreneurship. Life and markets are both unpredictable, and plans must be fluid and responsive. The “One Problem Pressing Plan” is just a reflection of the normal evaluation process.
While I still recommend the business planning process, I remind you to realize that beautifully crafted documents don’t always equate to business success. I’ve worked with many successful entrepreneurs who launched without a plan, and some with beautifully written plans that never materialized. You and your business idea are unique. Your planning process will also be unique. Beware of one-size-fits-all advice or statements from experts about how you should proceed.