Nervous About Writing Your Business Plan?

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Getting caught in the trap of your business plan as a document, and making your life and your planning process far more difficult than they should be, misses the point of writing it up. Let’s put the problem into perspective: you’re starting a business, feel quite confident in the business concept and have extensive knowledge and experience in this specific type of business, but you can’t go further because you’re “not a writer.”

That’s crazy, right? What’s wrong with this picture? Why do people assume a business plan is about quality of writing? I love good writing as much as the next person. But being a writer has nothing to do with writing a business plan.

A business plan is about content, not writing, formatting or pictures. I’ve listed some of the things your business plan needs to do below. Notice how none of them have anything to do with quality of writing.

1. Define Your Strategy. Strategy requires focus. Work out what you’re really selling, who wants it, why they want it and how your business provides something different from the competition.

2. Control Your Destiny. Determine where you want to go and break that down into specific, concrete steps with dates, deadlines and budgets. Don’t merely react to events; be proactive and set up a roadmap to follow; revise it as things change – and they will change.

3. Plan Your Cash. You’ve got to make a good, educated guess, then manage your planned cash flow versus actual cash flow very carefully. Growth costs money, and profits don’t necessarily mean cash, so write this out in detail. The maths isn’t hard, but getting your financials organised takes some time and effort.

4. Allocate Resources Realistically. This doesn’t just have to do with cash, but also with know-how and responsibility. Who’s in charge?

5. Communicate Your Plan. The business plan is the standard tool for communicating the main points of a business to a spouse, partner, boss, banker, investor, manager or other interested person. This is where we get confused about the plan as a document.

Firstly, we have to recognise that not all business plans are about communicating to outsiders. In planning, form follows function, so if you aren’t communicating to outsiders, lighten up! Make the plan useful to you in as simple a format as possible. Maybe it’s a cash plan and a presentation, or a cash plan and notes, but nobody’s saying your success depends on the document itself.

Furthermore, if you’re in a situation in which you have to communicate to bankers or investors, stay calm and stay focused on business. If investors want a presentation more than a plan document, focus on the presentation. If bankers want financial projections more than an extensive look into your company’s mission, focus on that.

Smart Tip

Don’t confuse your plan for the kind a business student would turn in. In business school, the plan is a teaching tool. When I give students a grade for a business plan, I look at writing. I judge the quality of the document in part based on spelling and grammar and, more important, completeness. That’s a special case, though, and it shouldn’t apply to you out there in the real world.

What The Business Plan Says About You

We’re afraid our plan has to be well written because it represents us and stands for our intelligence, experience or ability to run a business. Get over it. It isn’t a writing contest; it’s a business. Tell your story. Keep it simple. Bullet points are fine.

The bottom line is, well, the bottom line – not the editor’s pencil. A good business plan is about results, not writing. Don’t wait an extra minute for that “writer”. Get working on your plan. And don’t forget that the real value is in implementation. Prepare to track results, compare those results to your plan, revise, correct course and manage your business better because of your plan.

About the Author

Tim Berry is the founder of Palo Alto Software, a co-founder of Borland International, and a recognised expert in business planning. He makes several notable appearances in Fire in the Valley, Swaine and Freiberger's classic history of the PC industry, and is the originator of plan-as-you-go business planning. He has an MBA from Stanford and degrees with honours from the University of Oregon and the University of Notre Dame.