Whether you already have your company or if you are an entrepreneur , or you are thinking of launching your business idea on the market , surely, surely, it has touched you or will touch you, face a business plan . You already know that at Scrollthenews , we are not very “pro-business plans”, but if we have to do it, we are going to be agile and we are going to do it well by applying some strategic guidelines taken from the Lean Startup methodology.
Given our business strategy, from a Lean point of view, they will serve as incentives to face the task with guarantees. At the end of the post, you will be able to make a self-diagnosis of your business idea, cost and income plan and much more, to be clear about how the financing of your company will be.
In this post, I have thought of proposing a guide where I am going to give you the keys to building a business plan based on the Canvas Model and in the Lean style, agile and meaningful. I hope that it is really a useful document and allows you to make decisions, select the best financing and the investment needs of your organization.
In addition, at the end you can download the complete guide and a real example of a business plan in PDF with an example of the Scrollthenews business plan. Couldn’t ask for more, right? 😉 We will see how to build strategic plans, it is not complicated, but it does require dedication and above all knowing the market and for that nothing better than the Lean Startup methodology, the canvas and everything we talk about in the Scrollthenews blog .
But first of all, you need to ask yourself some questions:
- Why do I need to plan my business?
- What knowledge do I have of the real market or the sector in which I want to look for my business opportunity?
- What do I need to launch a company to the market?…
If you are not sure about the answer to these questions, you have come to the right place. In this Guide to write the business plan of your company, we will cover the following points:
- Application of a business plan.
- Definition of the business plan
- Model business plans and format
- The Business Model Canvasas a basis for developing business plans.
- Example of preparing a business plan: Real Case of Scrollthenews.
We will start at the beginning… What is the application of the document and why is it necessary to write it at certain times.
1.- Application of the Business Plan
Any document, be it the strategic plan of a company, the marketing plan, the financial plan or any other, must have an objective and a practical application. If not, it is better not to waste time writing it. That is why at this point, it is interesting to stop and think about why I need my business plan, why now and what will I do with it in the future.
- Facilitates obtaining bank financing. In my opinion, it is one of the main applications and one of the main reasons when it comes to getting to work on our strategic plan.
- It helps the promoters of the business idea to reflect on all the aspects that they must take care of when the company is up and running. From the commercial plan, to the manufacturing plan, going through suppliers and treasury…
- You participate in a program or contest where you are required to do so… it seems unbelievable, but it happens…
- You need to attract new partners or collaborators and in certain forums you have been asked.
- You need to define the stages you want your company to go through. It would be the vision you have of your new line of business for the future.
- It can facilitate the negotiation with suppliers, and I mean it can…
- It helps you be clear and condense information from each team member into one document that everyone should have access to.
- It can be a starting point, but I can assure you that it will not be fulfilled in 90% of cases, unless you have done your homework very well. Sorry to be a spoilsport…
- It will allow you to measure results and make decisions that involve changing the strategy you had defined.
In summary, these are some of the applications for your plan. Logically, the better built it is, the easier it will be for it to be a document that really helps you measure, make decisions and allows you to grow your company.
At this point… How do we define the business plan?
2.- Business Plan Definition
The business plan is a written document with a set of objectives, strategies and actions to carry out a business idea or business initiative. This document includes how the entrepreneurial team or the individual entrepreneur will develop the actions in each of the “departments” of their company to achieve the objectives set.
Business plans tend to quickly become obsolete, so my first advice is not to make it too long a document, allow it to be reviewed quickly and make it easy to apply the necessary corrections.
In practice, it is difficult for an entrepreneurial team to review the business plan frequently, so there are other alternatives, as you already know, that are much more agile and simple. I am talking about the Business Model Canvas or business model canvas that we have already discussed in other posts.
In the initial stages of our business idea, it is not advisable to start writing the business plan, because the knowledge of the market, customers, suppliers and the behavior of the sector we are targeting is scarce.
For this reason, my advice is to start with the Lean Cavas , if your idea is still at an early stage, or with the Business Model Canvas if it is already a little more advanced.
A business model is dynamic, changing and adapts to the market. A business plan usually undergoes little change in your life. I don’t know many companies or entrepreneurs who dedicate their time to modifying their business plan, after obtaining financing, for example, despite the fact that almost certainly, their business model will change.
The business plan has the credibility of the business model it represents and the business model has the credibility of how the hypotheses on which it was based have been validated.
In the next point, we are going to see the structure that a business plan should contain and then we will see how having the Business Model Canvas defined can help us. To do this, we will work with the Scrollthenews business model, as an example, on which we will end up building the business plan.
3.- Strategic business plans. Model and Format
In this section we are going to see the structure of a business plan, so that it collects all the necessary information, but that it does not become an insufferable document.
For example, the Scrollthenews business plan is a 24-page document, it is not excessively long, but it allows to count all the aspects that we will see below. The structure of our plan is essential to order our ideas, relate the information and avoid falling into unnecessary repetitions.
In the next point we analyze the structure of the Scrollthenews business plan, which you can download as a pdf at the end of the post.
3.1.- Structure of a strategic plan for your business
There are a wide variety of business plan formats, from the simplest to the most complex. But in general, for almost any business, a simple document that includes the most important aspects of our line of business is enough.
3.2.- Elements of a business plan
To work with a structured business plan, but simple and concise at the same time, at Scrollthenews we propose this scheme, which covers the main areas to emphasize when designing how your company will work in the future:
- Executive Summary
- Brief description of the activity, background and current situation
- Mission, vision and values
- Business model
- Strategy
- Market analysis and marketing plan
- Human Resources
- Investment and financing plan
- financial statements
Logically, depending on the type of business, if it is more industrial or less, for example, more emphasis will be placed on the production, quality, warehouse, etc. In the case of Scrollthenews, we don’t have all that, so the business plan is simpler. In any case, it is possible to reduce the content and keep the essentials in each case.
Undoubtedly, the business plan must include the fundamental aspects of any business model, so the first step should be to draw up a sketch of the business model you have in mind for your company.
4.- The Business Model Canvas, as a basis for developing innovative business plans
The Business Model Canvas or business model canvas is the starting tool to propose a business model, whether it is an innovative idea or a traditional business project. The nine blocks of the Business Model Canvas will help you define the structure of your business and highlight the areas where your knowledge of the market is less, or you have greater deficiencies.
4.1.- Summary of the 9 blocks of the Business Model Canvas
- Customers:Who do you direct your business to. Who is going to buy you? Initially, we identify our Early Adopters.
- Value Proposition:Why they will buy from you and what differentiates you from the competition.
- Income:How you generate income by offering the value proposition to your customers.
- Relationship with your customers:Through what means do you speak, receive queries, answer them, offer technical service, etc.
- Channels:How do you get your product or service to your customers.
- Key Activities:What activities are key in your day to day to be able to offer the value proposition to your customers.
- Key Resources:Those resources without which you could not offer your products or services. Personnel, materials, machinery, facilities, etc.
- Costs:Where is your money going in the company. Personnel expenses, rents, marketing, R&D, taxes, etc.
5.- Model of a business plan
We have already seen in point 3.1 the structure of a simple business plan. At this point, we are going to delve a little deeper into each of the points, once we have the canvas raised and we assume that many of the hypotheses of our business have been verified.
In this case, we are going to detail each of the points and later, we will see the example, for the Scrollthenews business model.
5.1.- Executive summary
The executive summary is the introduction where we briefly explain several points that allow us to put in background those who encounter our business plan for the first time.
The key points of this executive summary are:
- The problem we solve and the solution. That is why it is important to have worked well on the Value Proposal Canvas, which allows us to delve into the needs of our clients.
- Market opportunity. We briefly describe the market to which we direct our product or service, why it is attractive and why we have identified that it is a business opportunity.
- Our competitive advantage. In other words, what do we contribute that others do not, how do we differ from other companies, products and services that already exist in the market or that are close to what we intend to offer.
- Products and services we offer. What are we going to sell and how are we going to generate business
- Marketing plan. How we hope to reach the market, what main actions are we going to carry out to make ourselves known and reach our customers.
- Income statement of 5 years. What we estimate that we are going to sell, spend… an income statement based on what we believe, and with the credibility that this entails. The more we know the sector, our clients, we have started to sell, etc. we can make more realistic estimates. The less we know about the sector and the further we are from the actual sale of our products or services, the less credibility our numbers will have.
- It is important to describe who forms the entrepreneurial team if there are several people or just one, profiles and brief information on each one.
These are the basic points that the executive summary of our business plan should have, which should not be longer than 3 or 4 pages. As you can see, points 1,2,3 and 4 come practically by themselves from the previous work done with the value proposition canvas and Early Adopter.
Once we have the general idea of our company, it will be easier to start delving into other aspects as we will see in the following points.
5.2.- Brief description of the business activity
As the title of the section indicates, it is about giving a description of the activity to which we are going to dedicate ourselves, how we have arrived at it and review the current situation of the market we want to target.
We will talk about our sector, the products or services that we want to develop or are developing and the business opportunity that we have detected.
5.3.- Background and current situation of the company
It will be important to point out why we have come to identify this opportunity, what our experience is in the sector, what we have worked on previously and what the current market situation is and what opportunities it presents.
At this point we will talk about the solution proposed by our company, to cover the needs of the market we are targeting.
5.4.- Mission, Vision and Values
It is not a particularly relevant section in my opinion, but it is something that generally likes who is going to read it. In my opinion, it barely contributes anything, but it is something that is traditionally used.
- It would be the reason for everything we are going to do, outlined in three lines.
- The visionis what we want to achieve, what vision we have of our company in the long term. What would we like to achieve, change or what mark do we want to leave behind.
- The valuesare what is part of the DNA of our company and are the rules in which we are going to move throughout our business trajectory.
5.5.- Business model of your company
We have already worked on this section when we talked about the Business Model Canvas in a previous point. It is time to explain how we are going to generate business with our clients, what our value proposition is, how we are going to reach them, how we relate to each other, in short, we will define the 9 blocks of the business model that we have already worked on.
As always, the more we have worked on the business model, the more hypotheses we have tested and the more knowledge we have of the market, the more credible our business model will be, both for us and for the bank that we hope will finance us.