From Monday’s video on Facebook, you saw Patrick Bet-David discuss the two types of business plans. You can have the one page business plan and the business plan made for the investors.
I am a firm believer in having both because they serve two entirely different functions. Having a business plan the size of a dissertation is going to be read less often than something smaller and simpler, while only having a smaller plan leaves out a lot of the finer details needed to really execute your plan.
Here are some tips on how to create both types of plans and when to pull them out of hiding to ensure you’re hitting a large portion of your plans.
Both plans will require some initial clarity. Spend some time thinking about exactly what you want out of this coming year and why. The why part is crucial to your success. Put a purpose behind every single milestone you intend to reach this year. When you know exactly why you are executing something, you are more likely to follow through.
The Long-Form Plan
For your long-form business plan, if this is going out to venture capitalists (VC), include an executive summary. Keep this section short but effective. The executive summary should be no more than 3 pages. It should sell your business without going into major detail, which you can save for the interior pages. This summary should include a few different points.
The Executive Summary:
- The executive summary should demonstrate your knowledge of the market, trends and the industry.
- You should also show that you have a well-balanced and experienced team, if applicable.
- The executive summary should also convey your unique selling point. What would make someone want to invest in your company?
- It should include how you’re planning to make money. This is the important part for investors.
- Finally, include a proof of concept whether it’s competitors or market research. Include demographics about the target market. Investors want to see how big the potential market is before signing the checks.
If a VC is not part of your plan, still include an executive summary with all of these points. This will help legitimize your business and help keep you focused.
The most important part of the executive summary or any part of the business plan is to remain realistic. Don’t inflate the numbers or get your hopes up too high. This is a chance to realistically sell yourself and your business. Do the homework.
How long should your long-form plan be? Keep it under 40 pages. Each section should be void of any and all fluff. Keep it full of research and well-calculated projections. Charts and graphs are a simple way to eliminate the extra pages.
Another section of your business plan should include your marketing strategy. This is not your full-marketing strategy, which we will discuss how to do at a later time. Remember, the business plan should summarize. Will you engage on social media? How will you generate leads? What’s the budget for marketing? What’s the projected ROI? These are the things that should be explained in this section.
Finally, for the longer-form plan dive deeper into the financials. How much do you want to make each year and how will you get there? Write out the mathematical equation that makes the most logical sense for your business to achieve the financial goals it requires. I would also include the why behind that number here. What is the purpose of that number? To higher more employees? To scale? Expand your marketing efforts? What is the purpose of the money once you have achieved that goal?
Every single aspect of the business plan should have some time constraints to it. What will your business do monthly, quarterly, yearly? Determine the numbers for each section so you can ensure you are on track.
With the long-form business plan, I recommend reviewing it anywhere from monthly to quarterly so you can check in on the goals. How is your business performing? Are you on track? What needs to change? Checking in daily would be exhausting with this type of plan. No small business owner has time to read a 40-page document daily. Schedule yourself some time periodically to keep your business well on track.
The 1 Page Business Plan
Remember how we said everything in the long-form plan should be a summary? Well, take those summaries and make them even smaller. For the one-page business plan, you can skip the executive summary and the analysis of your team and market.
I recommend doing a new plan every single month. It’s a one-page document so it won’t take you that long. After you’ve checked in with your long-form plan, analyze the state of your business and craft month-long goals that fit your long-term objective. It’s quite possible you’ve hit some of those goals sooner than you planned (remember we had time constraints on the goals). You’ll need to adjust accordingly.
For the one-page plan, we recommend cutting the executive summary, market research, etc. Keep this page simple. What are the marketing goals and how are you getting there? What are the financial goals and how are you getting there? How many warm leads do you want and what is the plan to get there? Figure all of these things out on a short-term basis.
This one-page business plan should be viewed more frequently than your long-form business plan. We recommend reviewing this one-pager daily. By having this one-page plan you are setting your business up for success. You will consistently be reminded of your goals and plan of action, ensuring you stay focused in your business.
The goal of the business plan is to hold yourself and your business accountable. By writing out your goals and how you plan to achieve them, you are more likely to achieve those goals.