For any business owner, making the things in your head possible requires a plan. No, not just any plan: a written commitment to paper that will successfully propel you into your future.
I have been on record as being ‘anti’ business plans, and I stand by this even today. I consider the written business plan that consumes a week of effort and 30 plus pages to print a total waste of energy, time and ink. They are never filled with any sort of accurate data, mostly assumptions and hope. They are never consulted once finished and they offer a false sense of hope to the business owner.
But I do subscribe to a shorter version of the plan; in fact a one page version is my best. This template can be found on most business sites and business school curriculums. But like its predecessor, it needs to be a working plan, not a display piece in your business museum.
The one page plan, commonly called the Business Model Canvas tells the story of your business in nine chapters. This, if used correctly will assist a business, not only to plan a way forward but identify and help avoid any risks and failures that lurk in the margins.
Related: 10 Elements of a business plan that you can’t afford to leave out
Business model canvas
Let’s unpack the basic blocks, or chapters of the canvas. We will do this with a series of simple questions, that when answered will form part of the whole story of your business.
Value Proposition: What is it that you do, that is different and that adds value to others?
Target Sector: Who are your existing and potential future customers?
Channels: How do you propose to tell your future customers about the value you add?
Customer Management: How do you propose to look after and care for your existing customers?
Income: What different ways can you earn money from the above activities?
Key Resources: Who and what do you need to be on your side to make this happen?
Partners: Who else do you need to assist you?
Activities: What do the people or things in the above three need to do on a regular basis to make it all work?
Expenses: What will all of the above cost to start and keep running?
This is a very simplified version of the tool, but it works in this story format better than in other more academic or clinical version I have seen. People love to tell stories and if you are telling your own story, it becomes an adventure.
Assumptions and risks
The main issue with making things up as you go, is that you, well, make things up. And anything that is just made up has to comprise of a number of assumptions. An assumption can be defines as, in this case, as any fact you state in your business plan that you do not have complete control over the process or outcome.
Related: Business ‘plausibility’: What is it and does it affect you?
All of the assumptions in your story need to be identified and flagged as potential risks. These risks and then graded from high to low and dealt with accordingly, in order to mitigate the danger to your business.
Often start-up entrepreneurs make the mistake of trading from their personal bank account. This makes it harder to differentiate between your personal expenses and business expenses. It also doesn’t allow you to build up a credit risk profile for your business, which is an important factor should you ever want to approach a bank for financing. Rather, start trading as a business from the get-go by opening up a Business Current Account.
Tell your story
And then you have, not only a great story to live out, but a fully working business plan and a risk mitigation tool to avoid disaster. If you revisit the story canvas on a regular basis, update the story, identify the assumptions and mitigate risks, your business will not only grow, but live to tell your story: Just as planned.