Now's the time for bootstrapping--as in starting a business without outside investors. Despite the big downturn, and a tougher time finding investors, there are still businesses to start based on goods and services people need. And there's reason to start them, too: You've always wanted to; the market wants it; or, gulp, you've lost your job.
But here's a question for you: If you're not looking for investors, does that mean you don't create a business plan? Not if you're smart about starting up; not if you want to minimize uncertainty and maximize your chance of success; not if you want to give it your best shot.
However, it does mean that you should focus on just the portion of the business planning that's going to help you build and grow your business. That means your initial business plan is the first step in a planning process to be followed up monthly as you go. It also means that the plan itself is not a formal document; it might not be printed, it might live on your computer and it might be focused only on those parts of the standard formal business plan that you'll actually use.
Here are some important components of a stripped-down, bootstrap business plan. Please note that I'm not listing these in order of importance.
Strategy. Think it out, define it, share it. Strategy is focus. Focus on what you do really well and on the people who really care about what you do really well. You don't have to write and edit thoroughly, just get it straight. Bullet points and pictures are fine.
Review schedule. Set it up now, at the very beginning. Establish a regular time, like a monthly meeting, to review your plan results.
Sales forecast. Break it into components, like units, price per unit and cost per unit. Units can be hours or days, or trips; services also have units. Don't worry about being right--forecasts are always wrong--but get the keys down so you can see them later, see where and how and in which direction you were wrong, because that's what you'll use later to manage and steer your business. It's not a test. It doesn't go on your permanent record. It helps you manage.
Tasks. Break your goals and objectives down into specific tasks, with planned schedules, and clear responsibility assignments. You can call them milestones, even if it's just you managing the tasks. It helps to list important things that need to be finished so you can refer back to them later. And if it's more than just you, make sure everybody is clear on who's doing what.
Expense budget. An expense budget is a lot like the sales forecast, except that you control it (sort of) instead of your customers. You'll need this. It leads to managing cash.
Cash plan. Once you've got a sales forecast (with cost of sales, I hope) and an expense budget, you're on the way to having a cash plan. You have to add in buying assets and paying liabilities along with tricks such as sales on credit that go into the sales forecast when they happen, but go into cash flow when the payment comes. The cash plan is the most important part of the numbers, but I can't pretend you can do this and nothing else, because you can't do it without a sales forecast and expense budget.
Keep in mind as you develop this bootstrap-ready plan that form follows function. That's an important principle of business. Start your plan with the step that serves you best and review the steps monthly.
And let's consider as well the difference between the plan I'm recommending here, and the formal one that comes to mind when most people think of as a business plan. Unlike the classic, formal plan, the bootstrapped plan isn't used as a sales document to back seeking investment, or to back a loan application. So it doesn't have to include the executive summary, or the company history, or company ownership, management team description, or--an essential for investors, but not for bootstrappers--an exit strategy. And it might not even be edited, or printed. It's for management, not supporting information for outsiders.
Follow up with those plan review points: manage your plan, keep it alive, adjust it as needed. When you start the business and grow it, if and when anybody asks you if you have a business plan, you do--even if it isn't a printed document. Better yet, when you need the printed document, you're already most of the way there.
The author is an Entrepreneur contributor. The opinions expressed are those of the writer.