Ep. 77 How to write up a business plan

how write up business plan

In today’s episode, Anna looks at why you need to write a business plan, what it looks like, and how to write up a business plan effectively.

Specifically, there are a few formats that are particularly widely used, that you might want to consider:

(1) VC firm Sequoia’s guide, which starts with your purpose and moves on to the problem you’re solving and your proposed solution;

(2) Alex Osterwalder’s one-page business model canvas; and

(3) Ash Maurya’s adapted lean canvas, more suited to smaller start-ups.

And I have my own adapted version that I use with my clients.

*Resources mentioned during the episode*

The One Step Outside Facebook group – Join us over in the Facebook group to meet like-minded people who are working on reimagining success in their life and business and to get access to direct support and free training sessions from Anna. www.facebook.com/groups/onestepoutside

Book a free consultation call www.onestepoutside.com/freeconsultation



How to write up a business plan


Hello. Hello there, and welcome back to the podcast. Now we’ve been looking at a few different aspects of making changes in our business strategy, of course, because of the current situation that we’re in with COVID-19 if you’re listening live. But in fact, as I keep saying each week these are questions we should be and can be asking ourselves all the time, or certainly more often than not, these are things that apply questions that apply, strategic choices that apply throughout the life cycle of a business. And there will always be ups and downs and opportunities to diversify, to pivot and so on, there’ll always be some downtime that we can use. So do check out those podcast episodes over the last few weeks. If you haven’t listened to those, there’s plenty to be getting on with and hopefully something that will be really relevant. Really speaking to you at the stage of your business where you’re at.

Now, this week I wanted to answer a question that’s actually come in from a couple of people in my Facebook group. So if you’re not already a member, I’d love for you to join because it’s a great opportunity to submit questions and to participate in free training sessions and workshops, and get all sorts of other resources. Of course mostly, or most of all, it’s a place where you can meet like-minded people who are also working on re-imagining success and escaping the 9 to 5 in a sustainable way. So search One Step Outside, or Facebook where you can go to onestepoutside.com/community. So the question was how on earth do I write a business plan because there are so many templates online. And I must hold my hand up here and say that I even have created my own template that I use with my clients in my programmes.

And so where on earth do you start? Why on earth should you write a business plan in the first place?

Surely that’s something you only need if you’re a big formal organisation looking for funding and so on. So that’s what I wanted to talk about this week. And as we’ll see in a moment, this is something that can actually fit in really nicely with the different questions you may be asking yourself at the moment around possibly pivoting direction, diversifying, looking at different clients, looking at solving different problems, offering different products and services. So let’s dig in. What on earth is a business plan? Well, I found a definition while ago on Google, which is always a good place to start, which I really like. So it’s really super simple. It is a plan for the successful operation of a business, the plan for the successful operation of a business.

And because I’m sure you know me by now, success is not just financial. So this is not just a plan for me at least. And that’s where I come in with my own version of the template. But a plan is not just going to be, this is how I’m going to squeeze every last drop of money out of the business and find the clients that will pay me the most. I don’t care at all if I enjoy the work, I don’t care if it means I burn out. I don’t how it fits with my work-life balance and so on. So for me a plan, the successful operation of a business needs to be holistic and thinking of your personal purpose and definition of success and so on. But I’ll come to that at the end because what I want to do in the meantime is talk to you about a few other examples that are available for free online, which you may have come across and they’ll suit your purposes. But I do want to talk about why I think it’s important, of course, to add the layer that I add on there as well.

But before we get into that, why write a business plan. And I started by saying and it’s true that it originated, or certainly the main purpose of having a business plan used to be, or is that you need to submit it to your bank. If you’re going to open an account, or if you’re going to get a loan, or if you’re going for investors. If you want somebody to invest in your company, you need to show them that you’re going to successfully operate your business. So you need to give them a massively powerful, impactful pitch deck. A really big PowerPoint, Keynote presentation of everything about your business, every single aspect that makes you incredible and why they should invest in you. So that is one of the reasons and to be honest, it’s still a very valid reason. And one of the main reasons why you should have a business plan. And you certainly need one if you’re going after a loan, or if you’re going after investors.

However, even if you are a solopreneur, even if you are, which I know most of my audiences is, the people I work with, transitioning out of a corporate job, building a side hustle, building something very similar as a solopreneur, a freelancer, a small online business owner, or offline for that matter. It can be really helpful, and if not invaluable to have a business plan.

For a couple of reasons. The first is that you clarify your own thinking. When clients come to me and they’re saying, “Oh my gosh, I’m so overwhelmed, I’ve got all these ideas and is this going to work. And do I need that and so on.” Getting it down on paper, and literally you can set an alarm. You can just sit down grab one of these templates and just go boom, boom, boom, bash it out. It really helps to concretize if that’s a word the strategies that you have in mind, the ideas and so on.

In fact, it can help you sort through if you’re at the stage when you have three or four different ideas, then boom, write a business plan for each one and you’ll see, “Hang on a second.” You can start to see where the gaps are. You can anticipate possible problems. “Oh my goodness, this needs a massive investment, which I just don’t have.” Or, “I actually don’t know how this is going to work. So I need to find that out.” Or, “Actually I’m not a very credible person to bring this to life. I don’t even know how to do this.” And that’s really important to know because either it means that you’re not best suited to launch this idea, or it certainly means that you might need to upskill, or partner with somebody else and so on. So, clarify your own thinking it can help you sort through different ideas, and make a decision as to which one to pursue, which one’s going to be most viable and best suited to you.

You can see where the gaps are, you can anticipate possible problems. And it will really help you to stay organised, and be focused on those strategies you agree. So if you said, “Okay, these are going to be my marketing channels, this is what my financials will look like, this is the problem I’m solving.” And so on. That really helps you to stay on track rather than reinventing the wheel, and going all over the place as you move on. And that’s a danger when you’re working by yourself as well because it’s easy for you just to very quickly pivot all the time. And that can leave customers confused and you probably won’t be getting the results you want. Now, of course, another benefit if you do have a team, or will have a team, having that business plan will also help to keep your team aligned.

So on the same page, literally because you have the strategy, the plan. Okay. So hopefully you’re agreeing with me that it is important, and valuable to have a business plan. I imagine so since you’re listening to the episode, so let’s have a look at a few of the best practise examples online. And the ones I’m going to take you through, and I’ll tell you already are the Sequoia flow, or the Sequoia presentation format, the Business Model Canvas designed by Alexander Osterwalder. And the Lean Canvas, which is adapted from that Business Model Canvas by Ash Maurya as well. So let’s start with Sequoia now Sequoia, if you don’t know, are a big VC firm, been operating since 1972. And the list of the companies they’ve invested in is just ridiculous. Apple, YouTube, Instagram, Yahoo, WhatsApp, LinkedIn, Square, PayPal, and Stripe, NVIDIA, Zoom, Airbnb, et cetera.

I believe they missed out on Uber, which is one of their biggest mistakes ever. But as you can hear, massively successful list of companies they invest in, so they must know a thing or two about business models, business strategies and business plans. And for all of these, by the way, if you search Google, Sequoia business plan, you will find this right away. So I’m just going to talk you through the structure that they use, and but do pull it up and have a look yourself. And if this sounds interesting to you then you know that’s an option for you to go with. In fact, what I’m saying now to you already is there is no right answer as ever. There is no template which is the only business plan you should ever use. So if you are going for external investment, and certainly if you’re going to Sequoia for investment, then probably the Sequoia version is a pretty good place to start.

And that might look like a Keynote presentation deck, for example, if you are a leaner business, if you’re rather a solopreneur, or a freelancer who’s just doing this more for your own internal thinking, then one of the other two simpler versions might be more suitable. So let’s go through the flow of the presentation for Sequoia. And the biggest difference versus some of the others. And the number one thing they put, which I love, is that the first element of the Sequoia business plan business presentation is the company purpose. So this is defining your company in a single declarative sentence. And as they say, it is harder than it looks. And it’s easy just to talk about this is what we’re going to do, and these are the features and say on, but this is really about communicating your mission.

And I’m sure you’ve heard about talking about company purposes. There is, of course, Simon Sinek’s, famous TED talk and book Start With Why.

People buy, why you do something, not just what. An example Simon Sinek always gives is Apple, again, one of Sequoia’s successful investments. And it’s not, “Hey, we sell amazing computers.” It’s, “We believe in thinking differently and being creative. Here’s to the amazing innovators, and incredible design and all these things. And by the way, we make computers, but then we also make MP3 players. We make all these other things, so TV now and so on.” So the company purpose, a succinct message of this is our purpose, this is why we exist, this is why we jump out of bed in the morning to do this. This is our mission that our customers will share as well. Then Sequoia moves on to look at the problem, the pain, the point of your customer, and the solution.

So this is how we’re going to solve this problem. So really explaining, understanding what are the issues at the moment, why is there no solution that’s solving this problem at the moment. And how by all means share. If you’re going for investment, again, share how you discovered this solution. And why it worked so well, why it’s so compelling, why it’s going to be enduring. And how that’s going to solve the problem, solve the pain point of all these customers. Another distinctive element of the Sequoia presentation is that they ask why now? So this is really important. So why hasn’t your solution been built before? Again, I mentioned Uber a moment ago. I think both Uber and Airbnb there were certainly for Uber and also by the way, for Apple’s iPod, there were alternatives out there and they just didn’t take off.

And to some extent, they just hadn’t caught the zeitgeist of society. And people weren’t ready to get into the car with a stranger. But for whatever reason Uber caught the way at the right time. So why is this now, is it a magical perfect mix, a perfect storm of the technology is right right now, it wasn’t possible before. The customer is ready because look at these trends happening, and this is what’s happened. Maybe because of COVID-19 and the situation, this is the best time and the right time to solve this problem. And then they look at the market potential. So who is the customer, what’s the size of the prize? If you ever watched Dragons’ Den or Shark Tank as it’s called in America, they always ask, “What’s the potential, what’s the size of the market?”

And in fact, as Sequoia say, some of the best companies do invent their own markets. It might be completely new, but it’s very powerful to say, “Hey, this whole vegan trend is a massive growing industry. It makes up X amount of sales.” Or whatever it might be, the anti-plastic movement and so on. Competition. So who are your competitors and you need to outline why are you better? How are you going to win against these competitors. Business model and Sequoia called it, how do you intend to thrive? That’s an interesting one, but how are you going to actually make money? What are your revenue streams going to be? What’s your model in terms of charging money? How are you going to monetize this? How are you to make this work? Your team. So when you’re going for investments presenting to investors, they will be investing in you.

And again, this is something they often say in Dragon’s Den and Shark Tank. They’re investing in you as an entrepreneur, as much as they are in the idea. So what’s the story? How did you guys meet? If you’re several founders. Who are the key team members, how do your skills compliment each other? Sometimes when I mentor entrepreneurs I talk to them, and often in fact, let’s say it’s a tech startup. Each of the founding, the co-founders will be coming from a very similar background, which can be dangerous. That’s of course why they come to me with the branding and marketing help needed, but if you have two similar both personalities and skillsets, you’re probably going to miss something important. So one of my, and I hope you’re listening guys, one of my favourite examples that comes to mind now are the founders of the 7in7 Digital Nomad Conference.

They’re doing a conference on each of the seven continents over seven years. And I spoke at the Barcelona conference, which I think it was the second continent after they’d done Thailand before. And the three, the founders, they have the perfect mix of one being great at events, one being great at marketing, and then the third one being great at tech. And you can imagine they met together they had that perfect blend of skills to make that successful. And they’ve as a result had a great time and they had massive success with that. So if you can find a compelling team that really compliments each others skills, I think that’s a really powerful and important part of this presentation. And then financial. So, of course, you need to present financials, your projections, and how it’s all going to, what it’s going to cost. And how you’re going to, again, what are your revenue targets and so on.

And again, if you ever watched Dragon’s Den, or Shark Tank, you’ll hear the dragons say how unrealistic it is to say that you’re going to go from negative to half a million, whatever in a few months. And then finally, interestingly, they put this last, they ask for the vision. So if all goes well, and this is something I always put in my branding strategy as well, what will happen? So what is your vision? Let’s assume, and they give the horizon of five years. But if everything goes well, if you get the money you need, if you build the solution, what does that look like? What does your company look like? What does society look like essentially? So that’s the Sequoia presentation format. So just quickly running through again, but I would recommend that you Google it to have a look if this is something that sounds interesting for you. Company purpose, problem, solution, why now, market potential, competition, business model, team, financials and vision.

So that’s a great presentation format, the key elements to work through when you’re presenting to investors. However, again, most of us are probably not going for investment. In which case I would encourage you to rethink your ambition to have this incredible fancy business plan because it’s not necessary. Now, by all means, if you want to put this together that’s great for you and you might find it useful to share on LinkedIn, social media, on your website and so on. However, and if you are rather a solopreneur, or a freelance, again starting small with online business, then probably one of the one-page canvases might be a better bet for you. So I didn’t spend quite as much time talking through these. But again you can Google them, you can find the templates for free, you can sign up and get more details.

The main one is the Business Model Canvas, and this is more of a visual one-pager.

It’s literally a one-page plan, and it’s designed by Alexander Osterwalder. Now it has some elements from the Sequoia plan as well. And but just a few distinctions. So first of all, and if you are able to Google it, and pull it up then you can have a look with me if you want to pause and keep listening, or if you want to listen again later. But they really look at something which I think is also missing actually from Sequoia, which is customer segments. So who are the customers? And importantly then the customer relationships you’re going to have with those customers and your value propositions. And those things are a little bit different to what’s being included in the Sequoia piece. So customer segments, who are you creating value for?

Who are your most important customers? So let’s say Airbnb, you have two types of customers, you have both the hosts and the guests. And the hosts would be one particular customer segment, people with extra space, people who travel a lot, whatever that might be. And have an empty apartment perhaps or an empty room, who want extra money and so on. And then you’ve got the guests who are initially, at least they were maybe more backpackers, and couch surfers, and students and so on. But of course, since then that’s really expanded to reach business travellers, and more luxury travellers as well. So customer relationships. What kind of relationship are you going to have? Is it going to be very direct in person by a group? How is this interaction going to work? And then the value proposition, which is really important.

So what value are you delivering to the customer?

Which problems you’re helping to solve. That’s a little bit tapping into, of course, the problem and solution that Sequoia had as well. Now, apart from that, they have the channels. So what are the channels you’re going to be using to reach your customers? They talk about the key activities you’re going to be doing, the key resources you need and have available. And interestingly they have the key partners. So this is quite powerful when you’re an entrepreneur, and when you’re a startup. Actually partnering, collaborating with suppliers maybe if you’re a big company, but actually partnering with influencers and other entrepreneurs can be really powerful. So that’s an interesting one. And then finally at the bottom of the one page, you’ve got cost structure and the revenue stream. So again, the financials there… That’s the business model canvas again by Alexander Osterwalder.

And then just the final one is the Lean Canvas, which is adapted by Ash Maurya. And it’s very similar to the Business Model Canvas, but it is very much in the lean startup style. And it’s a little bit simpler. And again it has some really interesting aspects that aren’t included in some of the others. So like the Business Model Canvas, it has the customer segments and in fact, they call out also the early adopters. So these are the people who are going to love your product or service, who are the ones who are really going to use your brand first. They may be again with Airbnb, that was the students, the backpackers, the couch surfers and so on. So who are the early adopters who are going to absolutely love and jump on your business? They do now this Lean Canvas does call out the problem specifically and the solution.

And like Sequoia, they look at the existing alternatives they’re the competitors. Again, they look at the unique value proposition. They have channels as well, which the Business Model Canvas has as well, and cost structure and revenue streams. But something which I can find interesting is that they talk about the unfair advantage. So this is linked a little bit to the unique value proposition, and how you’re going to stand out versus your competitors. But it’s okay. What is making you the ones who are going to win? Why are you going to win? Is it because you have a lot of money. You have this expertise, you have this access to a network that nobody else has this technology. Maybe you have a patent or whatever. So what’s your unfair advantage? And then importantly, something else that’s missing from the other ones is key metrics.

So really what are your objectives? What are the measures you’re going to be using, what are the goals you’re setting? And really holding yourself accountable. So again, that problem, solution, value proposition, unfair advantage, channels, customer segments, and as with the others as well, cost structure and revenue streams. So I feel like I’ve talked out to you a lot, I’ve just introduced these three different formats for you. And again, the key thing to realise is that there is no right answer. So if you struggle with one of them, try another. If you don’t understand what they’re talking about just move on to the other one. And maybe find some examples online. Get in touch with me as well. I’ve had a lot of experience with working with startups and entrepreneurs with each of these formats, so you can reach me at podcast@onestepoutside.com, podcast@onestepoutside.com. Or, of course, message me on any social channel where you’re following me.

What I do just want to finish on is my own take on this and very briefly, and I mentioned this a little bit at the beginning. But those of you are my clients and I know you’re listening, which is great because it’s such a great way to really compliment the work that we’re doing together. I have a little bit like both Ash and Alexander sort of modified there are those that have come before me, I’m standing on the shoulders of giants. So I’m really taking the core bits of the different proposal. It’s still a one-pager. I have the customer, problem, solution and so on. And a couple of differences though and things that I think are really important. So I have the purpose, which of course Sequoia very clearly calls out as well. But for me, that’s not just the business purpose, that is also your personal purpose.

I have what success means for you and again, and again, I find that clients tend to get caught up in this number of clients, income stream, whatever this is going to make X thousand per month, per year or whatever it is. And again, again, I have to remind them no, or rather, yes, that is important, but meaningful success is not just the financial measure, it’s not just what an investor is after. It’s also how work-life integration is going to function for you, that is going to be meaningful for you. It means that it’s going to tick all those boxes of the things that the reasons why you are being pushed out of the nine to five, or whatever other job you’ve been doing and pulled towards this new business. So what does success look like for you?

When will you really feel like, “Oh my gosh, this is exactly what I wanted when I came up with this idea.” And also something that I feel is missing a little bit from the others is support. So what is the support you need from friends and family? Perhaps your partner from parents, from a mentor, from a coach, or whatever that might be. So if again, if you work with me, of course, we use my specific template, but there is no right or wrong template. I find this has worked well for me, for the clients I work with. But again, you can have a look at the Sequoia presentation template, and in particular, if you’re presenting to investors. There’s the Business Model Canvas, and of course the Lean Canvas as well, which can be helpful if you’re starting up and you’re a lean business. So I hope that was interesting in terms of a few of the different angles. Again, get in touch if you have any questions, and I look forward to seeing you next week. Bye for now.

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Join the One Step Outside the 9 to 5 Business Incubator – This is your roadmap to transitioning from a corporate job into setting up a meaningful business that will bring you more freedom, flexibility and fulfilment outside of the corporate 9 to 5. www.onestepoutside.com/9to5

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