Avoid Planning Paralysis with the One-Page Business Plan
February 22, 2010 by
Matthew
Filed under
Business, Making Money
What’s the first thing most everyone says you need to do if you’re going to start a business? Write a business plan. But what if you’ve never written a business plan? Or what if you have, and the plan for your last business idea took you three months to write – and you haven’t even looked at it since you wrote it?
Depending on what you read, you might think you need to come up with 30-50 pages of meticulously thought-out, detailed material, including comprehensive financial projections, market studies, contingency plans, and more. So it’s no surprise that the very idea of having to write a formal business plan has kept some would-be entrepreneurs from taking the leap into business ownership altogether.
Of course you do have a lot of options for help if you buy into the conventional wisdom that a formal business plan is an absolute necessity. For starters, there are several hundred books on the subject, ranging from the “For Dummies” version for about fifteen bucks, to Bankable Business Plans for Entrepreneurial Ventures for $95.00 ($52.78 a pound!). Or you can download some slick software, like Palo Alto Software’s Business Plan Pro for $100-$200. If you want to go all out, you also have the option of hiring a firm like Portland Oregon’s MasterPlans to create a plan for you, for an average of $1,500-$4,000.
Let’s be clear: if you’re in need of start up financing, you will need a more formal business plan, and it might even be worth shelling out hundreds or even thousands of dollars and spending plenty of time to create one. Even then though, some bankers will tell you less is more, at least initially. When it’s time for your proposed loan to go to committee – or whoever the decision makers are – they want to see everything. But when you first present the idea to your financier, they’ll probably just want enough to help them decide whether it’s worth taking it to the next step.
If you don’t need major financing to get your business going, even if you might need it down the road, and if you’re dreading the idea of creating a formal business plan, take heart. A study undertaken a few years ago by Babson College has some good news for you. The study, entitled Pre-startup Formal Business Plans and Post-startup Performance, looked at 116 businesses started over an eighteen year period, from 1985 to 2003. Here’s what they found:
The analysis revealed that there was no difference between the performance of new businesses launched with or without written business plans. The findings suggest that unless a would-be entrepreneur needs to raise substantial startup capital from institutional investors or business angels, there is no compelling reason to write a detailed business plan before opening a new business.
Does that mean planning is unimportant? No, it does not. It means you can actually start planning to run your business… planning to do business, rather than planning to plan to do business. It has been said that a goal with out a plan is just a wish. We definitely advocate putting together a written plan. But for most businesses, that can be as little as a single page.
Welcome to the world of the one-page business plan! We believe your plan should have the following elements, all of which should be able to fit on one page:
Vision – Your vision talks about what you’re building. Whether it’s to dominate your market or simply be the best at what you do, this one to three sentence statement tells your company’s future.
Mission – While your vision tells the end result of your efforts, your mission statement talks about why your company exists. It talks, in a general sense, about how you will accomplish your vision.
Objectives – This section can simply be a list of bullet points stating your business goals. These items might be, “Generate $X in revenue this year,” or “Hire two employees by the third quarter.” Don’t worry about specifics in this section; just list end results.
Strategies – Your strategies tell how you’ll meet your objectives. Without going into great detail, list bullet points, such as, “Build a strategic alliance with Chamber of Commerce and other service organizations to increase local visibility,” or “Maximize gross profit by utilizing co-op advertising with select vendors.”
Action Plans – You’ll still use bullet points here and won’t be overly descriptive, but these list items will have dates tied to them and offer more specifics than your strategies. Examples are, “Move to Greenway Business Park office – May 1,” and “Negotiate bulk rate pricing with XYZ Supply beginning March 15th.”
This one-page plan, like any good business plan, is a fluid document and will change as your business changes. If you do go for financing at some point, this plan will provide a starting outline for a more formal plan. And even then you don’t have to fret too much. (Check out GrowThink’s innovative Ultimate Business Plan Template software for an easy-to-use, effective way to create a professional business plan to take to any financial backer.)
Unlike the kind of plan you put together for financial institutions, the one page business plan is light, practical, and easy to refer to. You might even consider keeping it posted on the wall above your desk to remind you where you’re headed and how you’re going to get there!
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This is a great idea. Most non-funded startups really only need to know the scope, target market, and short term goals to get things moving. And getting things moving is the most important part of a startup!
I like this idea. I’ve been working on my business plan, but for some reason can never complete the entire document. The one page business plan sounds like a much better way to collect my ideas in a short outline. Just as you mentioned since I don’t require financing I probably don’t need a formal business plan. Even if I decide to put together a formal business plan my one page plan will serve as a good outline.
I know exactly what you’re saying and I totally agree. If someone is seriously considering getting into a business than the business plan may be the most important thing ever in jump-starting that idea which is why it is important to have a good business plan. I would definitely consider buying those programs offered above to help me create a formal business plan that will allow me to capture every aspect necessary in order to consider starting up a business.
I think the idea is applicable to bloggers like me as well. Have a not too plan ready so that you can just sit down and execute it. No need to think about next step everytime yo settle down to work.
You have given really a mind boggling tips to maintain and growth of the business. To maintain and for the long term planning for the growth of the business is really very tough, but the one page business plan which have the ability to solve out the all problems of the business strategy.
The one page business plan is a great idea. I know a professor who has his students start with even a smaller business plan. He gives each student one of his business cards and then instructs them to write their business plan on the back. Although he realizes that a larger plan is also useful, he tells the students that if they can’t explain the basic concept in the space of a business card, then either the idea is not clearly understood or it is simply a bad idea.
Paralysis of the analysis is always a problem but being efficient and following the basic guidelines is a good starting point for a business plan to guide you and to give you ideas. The objectives may not remain the same but it is a decent guidance.
This is so true. Securing financing is one of the main reasons to go all out with your business plan, but I like that you still recommend going through the motions by completing the most pertinent parts. There is value in writing a business plan, even for small and home businesses because it forces you to think.
Great post!
I mentioned your post on my blog this morning as part of a post on Best Things I Read All Week! Take a look here http://tiny.cc/XO1BI Cheers!
The guidance and advice here it top notch. It is more than just the ideas but getting them on paper is a matter where you can move forward. A business plan needs to more you to action rather than paralysis.
Thanks for including our post in your list!
I remember when we wrote our business plan. It seemed at first to be such a daunting task. The way that we did it was broke it down into small effective steps that we could easily take to improve our business.
I really like your idea of a one page business plan that you could easily use a a quick guide to stay on target.
This is pretty much how my business plan is. It’s very simple and only takes up about a half a page of paper.
Thanks for the mention on the One Page Business Plan(r). I took a class back in 1999 given by the author, and started using it right away. Then a few years later, I was certified to teach and use the process with my clients. It’s the only plan they’re willing to do!
Excellent post. You have to have a business plan if you are starting up a business.
Planing paralysis is indeed one of the key factor that slow me down. Sometime I keep on thinking of ways to become better and forget to move on.
I believe that this one page business plan will be of great use to me. Thks
I have used business plan pro many times before. The problem most people make with their plans is that they don’t make them their own by actually researching their own industry. They use the given templates and fill in basic info, and wonder why they fail in the end.
Lack of information and lack of planning leads to early failures. Not putting yourself in a position to succeed by not being ready is bad!