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It's Time to Rethink the Business Plan Outline

Use these tips as a guide to help you make the most of your time when creating a business plan.

Opinions expressed by Entrepreneur contributors are their own.

Last week I answered an e-mail from a woman who wanted to know what to include as a "fulfillment and delivery" category in a for a gym. Her problem was that she didn't see how that general topic--fulfillment and delivery--applied to a gym business.

I gave her two specific answers to that question:

  1. Don't include it. It doesn't apply to your business. Delete that topic from the outline you're working on and go from there.
  2. Fulfillment of a service in a gym business is about: hours that it's open; equipment; services like massage, physical therapy and personal training; locker rooms; laundry and other facilities.

I like the first answer better, frankly, because it helps debunk the myth of a standard business plan outline. That's particularly sensitive to me because of my involvement with Palo Alto , which I founded, and Business Plan Pro, which I actively support. I've said before that the most common mistake made by business plan software users is accepting the standard outline and its content as a rigid checklist.

Whatever business plan outline, tool or format you start with--Business Plan Pro, Microsoft Office, a book, magazine article, website recommendation or whatever--is going to be more useful to you if it's recognized as a tool, a guideline and a set of recommendations rather than a checklist.

Every business and every step in its history is unique, so a good business plan should also be unique. It matches what your business needs, not what the standard says.

For example, take the management summary that's almost always included in the standard business plan outline and business plan contents. It describes your management team including key members, their functions, their professional backgrounds and their accomplishments.

However standard as that piece of the plan might seem, it's often completely irrelevant. While every company should manage itself and steer its growth with planning, not every company needs a formal business plan document with a carefully prescribed outline and a complete list of standard contents. If you're running a business that doesn't need to find investors or borrow money from a bank, then you probably don't need to describe yourself (that is, your management team) to yourself, so that chapter is a waste of time. And if it's a waste of time, don't include it.

I could cite a lot of other examples, but I'll settle for two more. First, although most standard outlines include a company summary with history and ownership and such, that's silly when the plan is for your internal management and growth, not for outside readers. Second, although most standard outlines don't include the exit strategy, a business plan for investors needs to have an exit strategy because without it investors aren't interested.

I've dealt with this myth a lot in my 20-plus years involved in the business plan software industry. People think that business plan software imposes a standard outline or standard content--because a lot of bad business plan software does. But it shouldn't. Good business plan software suggests an outline and some standard contents, then fades into the background and lets you decide.

In fact, if there's one most common error in the use of business plan software, it's using the standard default outline without considering what does and doesn't apply to your business.

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