I wrote my first business plan when I was 24 years old. It was 150 pages long. That’s right, 150 pages. 150 pages full of dreams, diagrams, fairy dust, spreadsheets and rainbows that told everyone how I was going to master the universe and drive a van around and install home networks and repair computers at people’s homes.

Kinda sounds like Geek Squad or Geeks on Call right? Yep, except I wrote it in 1994.

I used it as a thesis in a business class and was told I was crazy and that the overhead on the business was going to kill it. I felt like the guy who had the idea for FedEx but no way to capitalize on it. Flash forward 10 years and those services became common place.

I had 15 copies in my trunk and that helped when I drove my Miata in the snow. The business plan ended up having other uses:

- Paper weight for other paper

- Kindling when I sat and read “A Christmas Carol”

- Material for creating tons of the most insane paper airplane designs

MOST IMPORTANTLY...I learned a hard lesson about being too ahead of the market. Most importantly, what I learned is that you need to write the right plan for the right audience.

From a post I wrote in my first blog, VentureFiles, I describe the basic business plan types:

Business Plan Type #1 – Business Plan for You
Essentially a data dump with headings, this is the one that gathers your thoughts and gives you peace of mind if you are a “J” on the Myers Briggs. I always think that these should be written first because it is essentially a knowledge dump and since there is no audience but you, there are no limitations.

Page Range: NONE

Business Plan Type #2 – Business Plan for Internal Strategy and Operations
I call this type of plan the “roadmap plan”. Think of this as providing your company and board with a look inside your brain and the brains of your management team. This type of plan is about alignment and communication of vision. It goes into deeper depth of product roadmaps, long term operations and greater performance planning. This means that the products and services section along with the competitive and operations sections will go a level deeper.

Page Range: About 60 pages but it depends on the maturity of the business so it could be longer.

Business Plan Type #3 – Business Plan for Investors and Raising Capital
This plan is what I call the “money plan” and many VC’s will say that they don’t read them, most see the value in them and all say that the exercise is necessary and important to address any issues that may arise in due diligence. Just because investors may not read them doesn’t mean you don’t have to do them. While for more experienced investors an executive summary is good enough, you can bet that those on the the committee who need to be convinced to approve the investment will want to read it and the associates at the firm will be reviewing it in detail and putting their “quant jock” hats to run the numbers to see if something weird pops up.

Granted, this type of business plan is half sales pitch/half business strategy and it must communicate that not only is there a market for your products/services but that there is a HUGE need for your product, it is scalable with the right investment, you have an A-team to execute and that you will be able to exit for a large amount that will see a double digit return on their investment.

Page Range: About 15-30 pages depending on how developed the business is and how complex the product/service offering is that you are providing.

In Part 2 we talked about selecting the right type of plan to fit your needs. Now that you have decided that, let’s get into the general structure of a business plan. While the outline structure I may propose works, there are many different ways to skin the cat. Here are a few examples…

Example Outline #1 – SBA Example Business Plan Outline

The Small Business Administration is focused on helping you sell the plan to a bank and get an SBA loan. They take a three section approach:

• Cover sheet
  
• Statement of purpose
  
• Table of contents
  
• Part I – The Business
  
• Part II -Financial Data
  
• Part III – Supporting Documents

Example Outline #2 – Business-Plan.com Consulting Firm

This is from Business-Plan.com and is from the book “Anatomy of a Business Plan & Automate Your Business Plan”:

• Cover Sheet
• Executive Summary
• Table of Contents
• Part I: The Organizational Plan
• Part II: The Marketing Plan
• Part III: Financial Documents
• Part IV: Supporting Documents

Example Outline #3 -BPlans.com (Business Plan Pro) Example

Business Plan Pro is the go-to program if you are looking to have software help you with the heavy lifting. This can be good in some ways but can really make you look amateurish if you are not careful. They use many wizards to gather information and this is the rough outline they produce:

• Cover Page
  
• Table of Contents
• Executive Summary: Write this last. It’s just a page or two of highlights.
• Company Description: Legal establishment, history, start-up plans, etc.
• Product or Service: Describe what you’re selling. Focus on customer benefits.
• Market Analysis: You need to know your market, customer needs, where they are, how to reach them, etc.
• Strategy and Implementation: Be specific. Include management responsibilities with dates and budgets. Make sure you can track results.
• Web Plan Summary: For e-commerce, include discussion of website, development costs, operations, sales and marketing strategies.
• Management Team: Describe the organization and the key management team members.
• Financial Analysis: Make sure to include at the very least your projected Profit and Loss and Cash Flow tables.

Now let’s get started…

Now that have had your questions answered, selected the type of plan you need to write and have an outline on how to approach this thing, let’s get writing. The first and last thing to write? The Executive Summary. Why? We will talk about that next time.