Business Plan Framework

My last posting, The Flexible Business Plan, discussed the benefits of having a simple business plan that easily modified rather than a complex and detailed plan. Let’s now take a look at a way to do this.

A Little Anatomy

As you certainly know, a doctor doesn’t just study the outside of a human body. They need to know what is inside, including the skeletal framework on which everything hangs. Artists do the same thing when they study anatomy to understand how the skeletal structure impacts appearance of the rest of the body. With that understanding the artist is able to more accurately depict the human form.

A business plan has a skeleton as well that I refer to as the business plan framework.

What is a Business Plan Framework?

Examine this little diagram to understand a little more about what I mean.

Executive Summary

Products and Services

Management  Background

Competition

Marketing Plan

Financial Forecast

This diagram above is not intended to identify all the components of a business plan but rather is for demonstration purposes. In a typical business plan an attempt is made to complete these sections and perhaps more in great detail. However, I suggest that while that may be necessary to some extent, it often makes more sense to view these as a business plan framework. When you keep this structure as a basic reference for your business plan, you will be less overwhelmed each time a change is made.

Let’s look at an example. In the Flexible Business Plan posting I mentioned a client who was introducing a new product. They started with a particular target market but soon found that another market may be a better initial market, particularly because it was a niche that was being underserved in regards to what their product could do. Incidentally, this market was dramatically different from the initial market, but the product was suitable for both.

So here is the point. Although they initially had some ideas on how they would market their product and who their competition was, and even some rough financial estimates, the plan was not so detailed and final that they could not change quickly. As a result, using this basic business plan framework they were able to make rapid changes as the target market changed, the marketing plan evolved, new sales and marketing contacts were identified, and the financial data changed.

The Bottom Line

If you want to take the basic business framework and work out details to your heart’s content, then feel free to do so. If, however, you want to be able to quickly adapt to changes, then I suggest you at least keep this business plan framework to help you keep focused, Sure, go ahead and put a little detail in if you want, but remember that the more detail you commit to the more difficult it will be to change.

Do you have a business plan and, if so, is it actually that useful to you? Be honest. Did the plan turn out to be more of an academic exercise that, when finished, was filed away to collect dust and never be utilized? If so, maybe it’s time to rethink the process.

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.

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