A Simple Plan
The first and foremost rule for crafting a strategic plan for your business is to not be so afraid of the process that it stalls your progress.
"You're always planning--the business planning document you fear is just output, says Tim Berry, president of Palo Alto Software and author of The Plan-As-You-Go Business Plan. "The plan just outlines what you want to happen.
Here are some guidelines for developing a straightforward and effective plan.
Scale it Down
Unless you have an idea for knocking out Google, you probably don't need a 100-page plan. Most early-stage companies need a strategic outline of about 10 to 15 pages. "Start by making your plan just big enough to manage your business, Berry says. "The heart of a plan is strategy, not a long, complicated text.
Cover the Basics
Bigger isn't better--it's confusing. You can always add components to your plan as your business grows. Review your capitalization requirements and capital resources. Clearly identify your market and provide a basic market analysis. List your assumptions and establish benchmarks. Outline basic financials, including sales forecasts and an expense budget.
Tap Online Resources
The Small Business Administration site has guidelines and templates for creating a plan. Berry's site features more than 500 industry-specific plans so you can find your sector and start writing. SCORE is a good resource for growing companies that need to expand their plans. Right-Brain Business Plan helps creative companies brainstorm the left side of their business.
Have a Fallback Position
"If everything goes according to your plan, that's great, says Thom Ruhe, director of entrepreneurship at the Kauffman Foundation. "But 99 percent of entrepreneurs need a contingency plan. Put in a line that says, 'If we don't have X dollars in sales by this date and we haven't obtained profitability, we will.' Do what? Double down? Change market tactics?"
Ask For Help
Before putting your plan to potential investors, seek the counsel of trusted friends, business owners and other entrepreneurs. Have them review your business plan, and listen to their suggestions. You typically get one shot with an investor, and vetting your plan is a good way to fill in holes and anticipate questions.
Keep it Fresh
Schedule a few hours every month to review your plan. This will ensure you use the plan as a living document rather than a stagnant framework. Use the review process as a way to gauge what's working and what needs to be altered about your business. "The very process of going through a business plan is useful," Ruhe says. "It forces entrepreneurs to review their thoughts and work through whether their business is viable."