Among the many steps one must take on the road to starting a business is creating the roadmap that will guide you on your way. First, imagine a road trip to the West Coast without a map, or better yet, without a smartphone mapping app. There is good chance you may not get very far, and furthermore, lost. Creating a business plan is your roadmap and guide to lead the way. The business plan is where you take all the market research you’ve done and valid proof of concept you’ve built and plotted out the path for your venture. Like a roadmap, a business plan guides you and your team through the startup phases while managing the processes.
There are typically two types of business plans: traditional and lean startup. If you are seeking funding, the traditional business plan provides more structure and detail, though it takes more time to write because it is comprehensive. Lenders and investors like comprehensive plans because they give insight to your startup. A traditional business plan typically includes nine sections: executive summary, company description, market analysis, organization/management, marketing and sales, funding, and financial projections. The plan tells a thorough story of how the business will execute and operate.
The lean startup plan takes less time to write, contains less detail, and has only key executionary elements. It is up to you to determine which plans works based on the needs of the business. The lean startup plan is designed for a faster start and has a relatively simple format for agility and making changes. The format provides the basics and key elements. One of the most well-known lean startup templates was developed by Alex Osterwalder, the Business Model Canvas.
The Business Model Canvas relies on utilizing some components of the Lean Startup Methodology. Simply put, lean startup involves doing ample research and testing your business ideas. Please keep in mind your business should somehow state the problem and your solution to it.
There is no right or wrong format for a business plan. Determining the format will based on the needs of the owner and the business. The most important consideration is, writing the plan!
For guidance on writing a business plan, visit www.sba.gov. The SBA and its partners offer initial counseling and workshops on writing a business plan. Remember, proper preparation and planning is key for a smooth road ahead. Make the SBA an early stop on your route to business success! We are here to help pave the way!