The 10 easy questions your business plan must answer
There appears to be a long list of experts who are coming out now and recommending that entrepreneurs do not write a business plan. The advice is that you don’t prepare, but you simply build something and try to sell it and then change your offering as you move along. As Mark Zuckerberg famously said “Entrepreneurs don’t have time to write a business plan”
Of course this is music to the ears of people who want to run before they learn to walk. Or existing owners those who hope to run the business on auto pilot and wait for the business to grow by itself.
A business plan doesn’t need to be a 50 page document to impress your bank manager, however it does need to answer some very simple questions.
Start Up business plan
1. What are you going to do and how does it meet the customers need?
2. How will you communicate your value propositions in a clear, concise and compelling fashion?
3. Why will the customer pay for it, how are you different to the competition?
4. How many potential customers have you spoken to (excluding twitter) and what is the size of the market?
5. How much will it cost for you to get each sale?
6. When will you get to break even?
7. How much money do you need to get to break even?
8. What is your gross profit per sale?
9. When will you be paid a full time salary?
10. What does your cash flow look like on a conservative basis in 3 months?
Established business plan
1. Who is your Core Customer?
2. How are you different to your competition?
3. What is your long term goal or BHAG?
4. What are your 3-5 year, 1 year and 90 day financial targets to get there?
5. What is the Brand Promise that is your binding commitment to customers? How do you measure this?
7. What must the business be capable of in 3-5 years in order to achieve the financial goals you have set on the way to your BHAG?
8. What are the top 5 priorities for the company over the next year and next 90 days?
9. What is the most important thing (critical number) the company must focus on in the next year and 90 days?
10. What are your hedgehog questions, the disciplined filter you apply to new opportunities?
When people take the strategic thinking and execution planning away from business, what is left? People who are trying to make things work with no planning and no idea what they are trying to achieve. It is better to spend 9 months trying to develop the right business plan and model than spend 9 years trying to execute a business model that will never succeed.