In my state of thinking on how to further simplify the business plan, the idea of a 5-page business plan just surfaced.
The overarching idea is to see how to get into five pages all that is really important in a business plan.
As you know, One of the main reasons resistance to business planning happens is because of the paperwork it produces.
The traditional business plan does not meet the needs of real-world bosses.
They now need a simple, effective tool that is easy-to-read, portable and keys them into what needs to get done.
It is on this note that I propose Building a 5-Page business plan to short-circuit some of the resistance to planning by simplifying the documents.
My job is to help you summarize your idea into a five-page business plan ready for execution.
Also, to help several businesses condense the bulk of their plans down to five pages and these core plans contain the essence of what you need to do.
According to scholars in the consulting and academic world, a business plan is a comprehensive research project with a thorough analysis of issues including customers, markets, competitors, pricing, marketing strategies, risks and detailed financial projections of three to five years into the future.
To create this kind of a plan, management works on it for months or hires a consultant to do it for them. Either way, it’s not unusual to invest a hundred hours or more into creating it.
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On the other hand, most of the business world defines a business plan as a brief written statement indicating goals and overall steps for achieving those goals.
The goals might relate to customers, sales, units sold, profits, facilities, etc. It covers a year, or maybe two.
This is something the owner or management puts together in a few meetings, and then gets it updated every year or two.
Considering these two definitions, one might wonder if there is a missing mark.
The comprehensive plan isn’t all practical for small businesses or non-profits organizations that lack the time or needed money to do all that work.
However valuable it might be to do so. And the brief plan can be very superficial to the point that it does little more than set ambitious goals with minimal guidance on what to do when the business encounters those pesky potholes in the road.
Hence, my idea of writing this article is to show you how you can get the best from both worlds by simply using the concepts of brevity, succinctness, to the point and focused text to tell a story that captivates the audience…
You can tell your business plan story with only five components of a single page each.
The idea is to keep it short and simple, but still useful which involves doing “just enough” research and analysis into “just the right areas” that will matter for achieving success with this business.
Let’s dive in and discuss the different plans that make up the 5-page business plan.
1. Strategic Plan—Forming the Heart of Your Story
The strategic plan is the first of the five types of plans. It is the starting point for the other four types of plans and the heart of your story.
Get this wrong and the rest of your plan and your story is unsure.
Get it right and the power of your people will be unleashed because people want to know where the business is headed.
The strategic plan is a single-page document that defines where and how you want to position your business.
It examines a list of factors that might influence your future.
Topics you must address in your strategic plan are:
2. Operational Plan—Bringing Your Plan to Life
The operational plan is the dynamic component that brings the strategic plan to life.
It is the first of ten years of the complete business plan and is developed simultaneously with the other four components.
It defines how the business will accomplish it strategic intent on a daily or annual basis. It breaks down the strategic goals into objectives and tasks to make them more understandable and manageable.
The operational plan also provides information to executives on how well the staff carries out its functional activities.
Along with the execution of functional activities comes the requirement for staff coordination. Work cannot be effective unless it is closely coordinated across staffs or functions.
The operational plan also helps management teams implement actions. Because it identifies the persons held accountable.
The operational plan becomes a good benchmark for reporting processes of key programs and projects.
This becomes the benchmark for performance measures of both the individual and the company.
3. Organizational Plan—Defining Your Corporate Structure
The organizational plan is the third of the five types of plans you must develop.
It defines the structure you must have to put the complete business plan in place. Organizational planning begins with the concept that structure follows strategy.
The strategies come from the strategic plan. The organizational plan is more than a wiring diagram or chart showing assignments; it must help you do certain things.
First, it ensures your people are all properly assigned to specific work or functions.
Like the operational plan, the organizational plan aids coordination among critical staff sections.
Another important function is cost control. The organizational plan illustrates adjustments that need to be made to streamline activities within the workforces.
The structure should always be tailored to the requirements.
Finally, the organizational plan must illustrate three ingredients:
A chart showing reporting relationships
A clear definition of responsibilities and
A clear definition of authorities
4. Resources Plan—Analyzing the Support You Need to Put Your Plan into Action
The resources plan defines the resources you must have to support your business.
It begins with an analysis of the annual targets and the goals of the strategic plan.
Normally, you can develop the resources plan in conjunction with the operations plan since the two are so closely connected.
The resources plan provides a great deal of information to the reader because it examines specific support requirements.
It contains, at a minimum, information on ten categories:
Staffing Levels: What are your short-term and long-term staffing requirements? What kinds of skills will be needed at each level, now and in the future?
Information Requirements: What is the volume and quality of your information?
Technology: does your business require technology? Do you have the most effective technology to do the job? What is the cost of staying up-to-date with technology?
Tools and Equipment: What support systems do you need to get all the tasks completed?
Intellectual Capital: How smart are your people? How smart will they have to be in the future? What do they have to be smart about? How are you using the intellectual capital database that now exists (if any)?
Time: What critical milestones exist in your plan? Where are the important decision points in the plan? What can you do to use your time more wisely?
Relationships: What networks need to be developed? Can strategic alliances and strategic partnerships help your plan?
Image: What is your image in the public perception? What should it be? How will you develop this perception or change a negative one?
Facilities: Can you estimate the facilities requirements? Is the need for physical space increasing or decreasing? What effect has e-business had on your industry?
Financial: Have you considered the budget constraints for short-term requirements? What are the long-term capital investment requirements? Do the financial numbers make good business sense?
5. Contingency Plan—Taking Evasive Action in a Crisis Situation
The contingency plan is basically used to build cases for alternatives.
It is important but is often the most frequently ignored type.
Generally, there are three types of contingency planning you must consider.
The first is when your goals are not accomplished or are blocked somewhere in the execution. You must have alternatives developed to eliminate the blockage. It is a fallback position. Normally you develop several courses of action to get you to the Multiple routes or alternatives permit your choices when the goal path becomes blocked. You don’t change your goals, just the actions to get you to the goals.
Another type of contingency planning is a big picture issue. This is a disaster plan for a business-created crisis that could shut down your company—A contingency plan should address such occurrences. Natural disasters are a primary contingency that companies plan for. Like manmade situations, these occurrences can be predicted and planned for.
The third type of contingency plan is developed from an internal view that examines incidents that could happen to your business and that would cause significant concern.
KEY QUESTIONS ON WRITING YOUR 5-PAGE BUSINESS PLAN
Use the following questions to set the stage for building your 5-Page Business Plan.
Don’t restrict yourself to the confines of the eight questions. Push to explore all additional topics as they relate to the 5-page model.
What is your understanding of the purpose of a business plan?
Does your written business plan match what you say and do—that is, does it match your story?
Does your written business plan contain all the elements suggested in this chapter?
Do you have the five major components—the strategic plan, operational plan, organizational plan, resources plan, and contingency plan—defined similarly to those earlier explained?
Can your complete business plan be written on five sheets of paper?
Are you ready to prepare a complete business plan?
Are you willing to set at least four days aside to develop a company-level business plan?
Are you prepared to complete the business planning cycle by providing the education and training necessary to support the finished goals?
The intention of this post was to highlight the hidden value of writing a business plan.
The value that necessarily provides you with time management rewards – with huge rewards for your personal and professional life.
I hope you found that this was a valuable read. What are your thoughts?
What values do you see in developing a business plan?
What’s keeping you from developing that business idea?
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