How To Write Your Own Business Plan

How To Write Your Own Business Plan

If you own and run a small business, you must know the feeling where you finish a hard day at work...and wonder how that could possibly have got you closer to your ultimate goal?

It is frustrating because all of us started our small businesses with a clear purpose in mind. It may have been to "be our own boss" or to "invent a better mousetrap" or to "provide a balanced lifestyle for my family."

But somewhere along the way, we went off track and now, all we do is go to work just to work hard!

How can we get back on track on a day to day basis?

Most of you would have heard of business plans but not many of you would have prepared one. And, of those of you who did, you probably did it in one of three ways:

  • You hired a consultant who dragged information out of you and then wrote something up that you can't follow because you don't quite know what everything means and you haven't got the time or resources to do it anyway - and that's if they haven't missed something obvious to you;
  • You bought a book with templates and you read it, following the steps in the book producing a plan that isn't "quite there" because it left out chunks of what made your business unique - following a standard book didn't work because your business isn't standard; or
  • You went to a lecture or a course, and with the notes, you tried to follow along - with the same result as above.

Well, you absolutely can write your own effective, actionable business plan.

In fact, you are just the right person to do it because you are the expert on your business. All you need is an effective and easy to follow process.

Well, here it is!

These are my 5 steps for you to take to write your own small business' Business Plan: -

  1. Get ready;
  2. Describe where you want to go;
  3. Understand where you are now;
  4. Create strategies to bridge the gap;
  5. Collate and implement.

Get Ready

Before you launch into the work of analysing and planning, set yourself up so that your planning exercise will be a successful one.

In order to increase your chances of successfully writing an implementable business plan, you need to make some key decisions about your planning process so that you are working within a defined context. Without this preparation, when you enter into your considerations, you will not be focused, and your discussions and decisions will be all over the place!

So, make decisions about: -

  • Why you are preparing the business plan. Will it be an internal or an external document? Who will be reading and implementing it? This allows you to decide how much information you need to include and how to pitch the contents.
  • The term of the plan. How far ahead do you want to look and plan? This decision is linked to the above decision about the purpose of the plan – for example if the intention is to create a plan to drive what you have to do in detail, you may need a short-term plan, or if what you need is a more distant look ahead so that you can clarify your longer-term ambitions, but then also need to outline some detail for the shorter-term, perhaps you need a medium-term plan. Once you have decided on the term, for example, 3 years, your discussions, considerations and decisions can be tailored to that term. In this way you will not be distracted by some potential 10-year strategy that sounds attractive but is outside of the scope.
  • Who you should involve in the planning work and discussions. If you are a sole owner and employ nobody else – well, that might be your answer! However, you may still wish to involve your spouse or your accountant or other business advisors. If you do employ staff, you may wish to include senior people with experience and knowledge of the business and your industry.
  • When and where you will hold the planning meetings. Believe me, while following a step by step approach may be easy – it still requires work and concentration. This means that you cannot spend an hour here and there to do this. You do need to set aside a block of time, preferably outside of your workplace in order to avoid interruptions. How much time you set aside will depend on the term of the plan. As a rough guide, if you work effectively, you can prepare a 12-month plan within a long day. A medium-term plan may need about 3 one-day sessions, and a long-term plan could take a good couple of weeks to complete.
  • The information you need to put together to inform discussions. Again, the amount and type of information will depend on the scope. For example, if you are preparing a long-term, strategic plan, you will need to obtain information about industry and market trends, and look at legal and other external developments that may affect you in the long term. For a 12-month plan, all you might need might be the latest financial information along with current information about customers, product range, pricing, cost, and so on.

Once you have made your preparatory decisions, write them down!

In my experience, I have seen more than a few planning meetings disrupted because the participants have not stuck to the scope of the exercise and been waylaid by discussing matters outside of the scope. For example, many meetings go awry because discussions about sales over the next year have suddenly been derailed because an “interesting” discussion arises about the new services that “should” be introduced over the next 3 or 4 years.

Writing down your scope is a reminder of what you are there to do.

Once you have done that, go and book your venue and put the date(s) into everyone’s calendar!

You are just staring the process, don’t backslide now!

Oh, and one more thing before you work on the three phases – don’t get into paralysis by analysis. Always, progress is better than perfection. Work from the information at hand and from your instinct and keep moving. You can always finish the planning process first and then come back later to tweak it.

Phase 1 – Where Do I Want To Go?

In the first phase of the process, you define what you are really working to achieve.

This important phase of defining and describing your vision sets the scene for everything else that is to come.

Some businesses summarise their strategic direction into a “Vision Statement”. You can if you wish, but to me, the polishing of a nice statement is beneficial but not strictly necessary. I’d rather you end up with a couple of paragraphs describing where you want to end up and what you want to ultimately achieve – as long as in future when you read it, you are inspired, and it reminds you of why you are working so hard.

The important part of this phase is the process, which provides the motivation and emotion behind the vision rather than the printed statement itself.

The steps in this phase are: -

  • Remind yourself what the purpose of your business is. When you started the business, you had at least one purpose. It might have been to serve a particular market with the best product of its type; it may have been to enjoy the engagement with your customers; it may have been to secure and afford a balanced lifestyle for you and your family, or it may have been a combination of purposes. The purpose is what drove you to start your business, but in the day-to-day hustle, it is often forgotten and replaced by what you “have” to do – put purpose back in your life so that the things you do are the things you have the privilege of “getting” to do.
  • Describe the picture of your ideal business once you’ve “made it”. Brainstorm this and change this until you are satisfied with a full and complete picture of your “ideal” business, one that you will be proud to own and delighted to work in. Describe what it physically looks like. Imagine getting into a time capsule, coming out in the future and spending a day in the business – and describe the day. Look at what it actually does and how it does it. Who will it serve and how does it serve them and how do they feel about the business and why? Who works within it and what do they do and how do they feel? How are the team members treated and what do they get out of the business? How do you feel – what do you like about being there and being the owner?
  • Write down the description of the vision. As I said above, you can write it in one or two sentences, or you can work on the picture of the “ideal” business and write a page, or you can write a series of dot-points. However, you write it up, make sure that it evokes the emotions that you felt when you were working on the first two steps. Also, make sure that you will be able to remember what you meant, and the emotions, in the future. To do this we use the SMART model and ask yourself if what you have written is Specific, whether it is Measurable, whether – even though it might be a stretch – it is realistically Achievable, whether you have described a Result (as opposed to an action), and whether it has an element of time attached?
  • Once you are happy with the description, analyse the reality of that vision by asking yourself four questions:
    o “Once I have attained my vision, what will my customers think about my business?”
    o “Once I have attained my vision, what will my team members say about working there?”
    o “Once I have attained my vision, what will my finances look like?” and
    o “Once I have attained my vision, what key business processes will I excel at.
  • These four questions tease out the measurements of what “success” means in attaining the vision and give you important concrete things you have to do in order to be successful.
  • From the above, write down your draft long-term goals that you have to achieve in order to attain your vision. There are two points about this. The first is that these are in draft because as we work further you may change or amend them as more information and consideration comes to light. Second, these should reflect the measurements you teased out in the above step. For example, if one of the things your customers will say once you have attained your vision is “they really go the extra mile” then one of your goals should be about how you organise your services so that you do go the extra mile.

Phase 2 – Where Am I Now?

In the second phase of the SMART Business Planning Model you are going to put your vision to one side for the moment and change your point of view to look honestly at where you are right now.

This means taking your business piece by piece and examining what you are doing, how you are doing it, how well you are doing what you are doing, and should you be doing it at all.

How you break up your business into its component parts will depend on you and your business, and how it is structured, but I suggest you at least look at: -
• Customers, sales and marketing;
• Current and proposed (within your scope!) products or services;
• Business systems;
• Human resources;
• Operations and administration;
• Physical space and equipment; and
• Finances.

In the below steps, the objective is to arrive at a truthful state of your business now, so that you can later compare it with where you want to go. In order to do this, and depending on the scope for your plan, you may have to spend more or less time on the external issues recognised in the first step.

The steps in phase 2 are: -

  • Conduct an external situation analysis by using the acronym PESTLE. Look at the external situation outside your business and note the factors that may have an impact on your business during the term for which you are planning. Categorise these outside influences under Political influences, Economic influences, Societal influences, Technology influences, Legal influences, and Environmental Influences.
  • Conduct a SWOT Analysis of your business as a whole. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Strengths and Weaknesses are characteristics of your business that are in your power to change, for example if you have a weakness of poorly trained staff you can increase training for them. Opportunities and Threats are external influences (suggested by the above exercise) that you cannot control but if significant enough, you must attempt to take advantage of or mitigate against.
  • Conduct a SWOT Analysis of each of the identified components of your business. The objective of this second SWOT exercise is to arrive at a detailed understanding of where you stand on the important components.
  • Summarise your SWOT Analyses to arrive at key strengths, weaknesses, opportunities and threats and then consider for each of them the question “so what?” The objective here is, for each identified SWOT, to discover why it is important to your business – to use the strength, fix the weakness, take advantage of the opportunity, mitigate against the threat – what impact it may have on your business, and what you may have to do about it.

Phase 3 – How Do I Get There?

In phase 3 you will review your vision, the key measurements of “success” and your draft long-term goals and compare them to the lessons learned about your strengths, weaknesses, opportunities and threats.

In this third phase we are looking to finalise long-term, medium-term, and/or short-term goals as appropriate to your planning term, and to create strategies, and if necessary, detailed action plans.

The steps of this third phase are: -


  • Review your description of your vision and the measurements of “success” raised by the four questions. Review your draft long-term goals.
  • Review the results of your SWOT Analyses, especially the “so what?” conclusions.
  • Records and describe the “gaps” between where you are now and where you want to be. At this stage, you do not have to be very detailed about those descriptions. For example, if your vision describes a workforce that is responsive to customer needs, but your current situation includes staff who do not engage with customers, your gap can be described as “staff need training on customer service” and/or “need to find and employ people who can respond to customers”. At this stage, you do not have to detail what kind of customer training or how you will find the new staff.
  • Review the gaps and review your draft long-term goals to see if they are still appropriate and change or amend them as necessary.
  • Taking your final long-term goals, decide on the strategies you will need to carry out in order to achieve those goals. In the example above, the gap may have led to a goal that you “will create an organisational structure that is fully responsive to customer needs within 7 years”. This may then lead to the following strategies: -
    o Populate best organisational structure with qualified people
    o Instigate customer service training for all staff

Review the strategies to see if they are SMART.

  • Review your strategies and prioritise them within the context of the term of planning. Which strategies need to be started and/or substantially completed within that time frame?
  • Establish milestones for the prioritised strategies that describe how much of those strategies you will complete within your planning term. For example, if the above strategy of populating the best organisational structure with qualified people will take you 7 years and your planning term is over 12 months, your 12-month milestone might be “to finalise an organisational chart and hire the customer service manager by the end of the year”. Review the milestones to see if they are SMART. In this way you have cascaded long-term goals into SMART strategies and then into SMART milestones.
  • The next step is only necessary for short-term plans, or if you are working on short-term milestones in a medium-term plan. Break down the short-term milestones into detailed action plans for each milestone. List the detailed steps you will need to take and assign a person responsible, negotiate realistic timelines, and describe the measurement of successfully completing each step – what the outcome (not the activity) of each step will be.

Putting It All Together And Getting It Done

Now it’s time to put it all together into a written document (so that you have recorded your thoughts, the process and your decisions for future reference) and implement the plan.
The SMART Business Planning Method assumes that as you have been recording and documenting as you proceeded, you should be able to use the worksheets of each step to collate into your final document without a great deal of retyping or rewriting.

As already described above, the basic contents of an internal business plan are: -
• Introduction
• Vision
• Goals, Objectives and Milestones
• Strategies
• Budgets
• Monitoring and Evaluation
• Subsidiary sections or Appendices (including Action Plans if appropriate)

You will have noted above that we have not yet worked on “Monitoring and Evaluation”.

You will do this at this stage of the process, having now worked out your strategies and action plans and knowing what’s ahead of you.

One of the most important elements of an achievable, implementable business plan is the consistent and scheduled review of results. This allows you to be disciplined about action, and to correct and alter methodology as required if what you are doing is not getting you the outcomes planned for. So now: -

  • Conduct a SMART review of the document to ensure that you will understand what you have written over the coming busy months.
  • (Go on, this is when you can tweak it if you want with more detail or more information, but remember progress is better than perfection).
  • Schedule various dates when you will monitor the effects of the planned activities (or action plan steps) and measure their success - aim for once a week in the beginning and then at least once a month.
  • Schedule immovable dates and times when you will spend as much time as you need (an hour to a day depending on how often you will do this and how complex your business plan is) to evaluate the success of your planned activities. In these evaluation sessions you should: -
    o Review the results during monitoring
    o Ask what went right/wrong and why?
    o Are the outcomes being achieved, and if not is that due to procedure (change what you are doing) or system (change how you are doing it)
    o Make any necessary amendments (your business plan is not set in stone – as long as you are always focused on your vision, the strategic direction, and you are focused on working toward it, then you can make any changes to make it work better).

These evaluations should initially be weekly, then progressing to monthly.

  • Publish and publicise a calendar of tasks, deadlines, milestones and scheduled monitoring and evaluation activities. A public schedule helps everyone to commit.
  • Instigate clear and honest rewards for getting things done and doing things right; instigate appropriate “penalties” for not doing things. The reward mechanisms are easy enough – announce successes people have had, offer (even to yourself) treats like dinner out at an expensive restaurant or a spa treatment, and so on. “Penalties” however are trickier and do require some thought. Rewards are indeed more motivational than punishment, but some form of “penalty” is required from time to time.
  • At least once a day at the beginning, read your vision description to remind yourself (and your team) about what really matters. Once you are more practised at referring to your vision, you can reduce this to once a month. Discuss what you have done to live up to or work toward the vision, and what you have not done, always committing to do better next week. The objective is to live and breath the intention of the vision and to ensure that everyday practice uses the vision as a guide about how to behave and what to do. The objective is to get to the point where every decision is consciously measured against the vision: “if I do this, will it get me to the vision faster?”

Oh, and one last thing – START NOW!

Do not delay, do not wait until “the right time”. You have completed your business plan – congratulations – move on, use the momentum!

If you would prefer to follow this process through an eBook (accompanied by a free 4-part video training series on how to write your own business plan), my online training business "Teik Oh Dot Com" has the eBook and free video training available and you can get it by clicking here.

What's really exciting is that Teik Oh Dot Com also offers an online workshop called "Your One Day Business Plan" - a new method of guiding you through the writing of your own business plan in just one day. Read more about it here to see if it suits you.

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