R&D had left them broke.  They needed to move fast.

Senior officers focused all their attention on attracting private investors who would share their vision of the company.  A group of investors entered the scene.  They liked what they saw.  They had the money to invest and were ready to proceed.  They asked to see the business plan.

The most recent plan had been written several years before.  Some market research had been done, but management still had decisions to make and essential company information wasn’t available.

• How much new funding was needed?  Over what period of time?  How much control would the new investors have?  How would the new capital be deployed?
• Financial information wasn’t current and there were no financial projections.  Tax returns weren’t up to date.  The company had never hired a chief financial officer.
• The company wanted to sell products into several industry segments, but there was no marketing plan.  No senior officer was in charge of marketing.  There were only conflicting marketing ideas under discussion.

The company attempted to update the old business plan, but – lacking vital information – they ended up with something that discussed the company’s history, described the products, and speculated on their potential, but fell short of telling the investors what they needed to know.

Because management hadn’t planned their business plan, they weren’t ready when the time came.  The investors went away.

Think of your mini business plan as an elevator pitch on paper.  Think highlights.

The plan can be 1 to 10 pages.

Being as concise as possible, include the most important aspects of your business in these sections:

• Mission statement
• Business description
• Market / industry overview
• Marketing plan
• Financial projection charts (balance sheet, cash flow statement, and income statement) covering 3 years.  List main categories only.  Follow with your most important assumptions.
• Biographical sketches of your key management / technical team

If you feel compelled to use images, be careful to use only those that make a powerful contribution to the plan.

A mini business plan is like a short story – there’s no room for fluff.  Every word must count.  Avoid jargon and buzzwords.  Rewrite, rewrite, rewrite – until you have a crisp, clear elevator pitch that gets you to the next stage in building your company.

What are the uses for a business plan?

1.  Raising capital.  A good business plan can convince investors to put up the money to help start a new venture or to move a business to the next level.

2.  Financing.  Give your loan application a boost.  Attach an updated copy of your business plan.

3.  Attracting executive talent.  Your new marketing VP will understand the company much faster with an up-to-date business plan at hand.

4.  Alliances.  Would-be strategic partners can learn about your company by studying your plan.

5.  Departmental uses.  Sections of your business plan can be the starting point for a detailed marketing plan or a human resources policy.

6.  Keeping current.  Update your business plan according to the calendar or to take account of changes in your company or industry.

7.  Staying on track.  Are your current activities or near-term goals in line with your original strategy?

8.  Long-term planning.  Use your business plan as a platform for testing future scenarios.

If you have more uses for a business plan, please leave a comment.