The One-Page Business Plan – It Might Be All You Need
Posted by Matthew Toren, on July 20th, 2010
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One of the common things you’ll hear from people when you say you’re going to start a business is that you need to write a business plan. And there is no doubt that planning is a vitally important part of the process when starting out. You need to know where you’re going and how you plan to get there, and that’s exactly what a business plan should spell out. The problem is, many would-be entrepreneurs have never written a business plan, and are overwhelmed at the very thought of it. Sure, you can find “how-to” resources online that will spell out all the sections and what they should contain, but none of the examples are going to match your business and your circumstances exactly, and if you have a unique business model at all, good luck finding a decent resource.
Depending on what you read, you might think you need to come up with 30-50 pages of meticulously thought-out, detailed material, including comprehensive financial projections, market studies, contingency plans, and more. So it’s no surprise that the idea of having to write a formal business plan has kept some budding entrepreneurs from taking the leap into business ownership altogether.
As I mentioned, you do have a lot of options for help if you buy into the conventional wisdom that a formal business plan is an absolute necessity. For starters, there are several hundred books on the subject, ranging from the “For Dummies” version for about fifteen bucks, to Bankable Business Plans for Entrepreneurial Ventures for $95.00. Or you can download some slick software, like Palo Alto Software’s Business Plan Pro for $100-$200. If you want to go all out, you also have the option of hiring a firm like Portland Oregon’s MasterPlans to create a plan for you, for an average of $1,500-$4,000.
Let’s be clear: if you’re in need of start-up financing, you will need a more formal business plan, and it might even be worth shelling out hundreds or even thousands of dollars and spending plenty of time to create one. Even then though, some bankers will tell you less is more, at least initially. When it’s time for your proposed loan to go to committee – or whoever the decision makers are – they want to see everything. But when you first present the idea to your financier, they’ll just want enough to help them decide whether it’s worth taking it to the next step.
If you don’t need major financing to get your business going, even if you might need it down the road, and if you’re dreading the idea of creating a formal business plan, take heart. A study undertaken a few years ago by Babson College has some good news for you. The study, entitled Pre-startup Formal Business Plans and Post-startup Performance, looked at 116 businesses started over an eighteen year period, from 1985 to 2003, and here’s what they found:
The analysis revealed that there was no difference between the performance of new businesses launched with or without written business plans. The findings suggest that unless a would-be entrepreneur needs to raise substantial startup capital from institutional investors or business angels, there is no compelling reason to write a detailed business plan before opening a new business.
Does that mean planning is unimportant? Again, no it does not. It means you can actually start planning to run your business… planning to do business, rather than planning to plan to do business. It has been said that a goal with out a plan is just a wish. I definitely advocate putting together a well-thought-out, written plan. But for most businesses, that can be as little as a single page.
Welcome to the one-page business plan! Your plan should have the following elements, all of which should be able to fit on one or two pages:
Vision – Your vision talks about what you’re building. Whether it’s to dominate your market or simply be the best at what you do, this one to three sentence statement tells your company’s future.
Mission – While your vision tells the end result of your efforts, your mission statement talks about why your company exists. It talks, in a general sense, about how you will accomplish your vision.
Objectives – This section can simply be a list of bullet points stating your business goals. These items might be, “Generate $100,000 in revenue this year,” or “Hire a full-time assistant by the end of the third quarter.” Don’t worry about detailed specifics in this section; just list end results.
Strategies – Your strategies tell how you’ll meet your objectives. Without going into great detail, list bullet points, such as, “Build a strategic alliance with the Chamber of Commerce to increase local visibility,” or “Maximize gross profit by utilizing co-op advertising with select vendors.”
Action Plans – You’ll still use bullet points here and won’t be overly descriptive, but these listed items will have dates tied to them and offer more specifics than your strategies. Examples are, “Move to Greenway Business Park office – November 1,” and “Negotiate bulk rate pricing with XYZ Supply beginning March 15th.”
This one-page plan, like any good business plan, is a fluid document and will change as your business changes. If you do go for financing at some point, this plan will provide a starting outline for a more formal plan. And even then you don’t have to fret too much. (Check out GrowThink’s innovative Ultimate Business Plan Template software for an easy-to-use, effective way to create a professional business plan to take to any financial backer.)
Unlike the kind of plan you put together for financial institutions, the one page business plan is light, practical, and easy to refer to. You might even consider keeping it posted on the wall above your desk to remind you where you’re headed and how you’re going to get there. If you’ve used a one-page business plan – or a traditional plan – share your experience with the community in the comments!
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