Ten Questions to Ask Before You Finish Your Business Plan
By the time you’re ready to dot the last i and cross that last t of your written business plan, chances are you’re more than ready to be done with it. But before you sign off, review the plan one last time. If you have the luxury to let your plan sit for a week before reading it through, even better. That extra time will allow you to assess your plan with fresh eyes.
In our experience, some of the most important refinements are made to a business plan during the final review process. Consider this list of ten questions to ask about your plan.
Does my business plan realistically assess your business idea?
We’re all for enthusiasm, especially when it gives you the motivation and inspiration you need for the hard work of putting a business together. But we’ve learned from hard experience that a clear-eyed assessment of the strengths and weaknesses of a new enterprise is crucial to success.
Identifying weaknesses doesn’t mean you have to scrap your idea. In fact, it can help you develop a strategy that plays on your strengths and minimizes your weaknesses. Read over your plan, taking the point of view of a very skeptical investor. Does it offer a convincing argument that your business idea will succeed?
Does my business plan adequately describe your customers and what they want?
If there is one thing that all successful businesses — for-profit and nonprofit, sole proprietorship and multinational alike — have in common, it’s delivering what customers want. To keep your customers satisfied you have to know them as well as you possibly can. What really makes them tick? What motivates them to buy (or in the case of a nonprofit, contribute)?
As you review your plan, consider it from the perspective of potential customers. Have you taken their measure accurately? Will your marketing plan reach them with the message you want to convey?
Does my business plan establish specific timelines?
An effective plan lays out, step by step, what you need to do. Just as importantly, it establishes a schedule for when you must take each step. Without a firm timetable, projects and plans have a way of slipping. And in these competitive and fast-changing times, lost time can mean lost opportunities.
Include a timetable for when you will accomplish each action step described in your plan. Be sure, too, that you spell out the important milestones along the way.
Your timetable should be ambitious, but not based in wishful thinking. Give yourself and your key players time to get the job done.
Do my business plan financials add up?
One of the biggest reasons new ventures go belly-up is poor financial planning at the beginning. No plan can prepare for everything, but your financial plan should be conservative enough — and honest enough — to give you some breathing room if the business doesn’t get off the ground as quickly as you’d like. Take time to review your financials. Make sure that the numbers are realistic. If you have any doubts, review your financial forecast.
Does my business plan spell out specific goals and objectives?
Abstract ideas and generalities have no place in a business plan. Your plan should be as specific as possible, especially in spelling out your goals and objectives. Each one should set out specific actions that will be taken, along with a precise way of determining when it has been accomplished. Review your plan from the point of view of the key employees who will be asked to carry it out. Does the plan make it clear what they need to accomplish?
Will my business plan guide and inspire employees?
Telling your key people what they need to accomplish is important, but inspiring them is equally critical, especially if everyone on the team is going to have to work overtime. An effective plan lays out a strategic course. At the same time, it inspires employees by making them feel part of a team where everyone matters and every job is important. As you review your plan one last time, think about whether it makes a convincing case for success. Does it acknowledge (and encourage) the contributions of all employees?
Is my business plan writing clear and jargon-free?
Your business plan should be understandable to as wide-ranging an audience as possible, from investors and employees to the general public. To make sure that your plan is clear and persuasive, it should rely as little as possible on industry jargon.
Sure, if you’re writing a business plan for a new biotech venture, you may need to throw around terms like monoclonal antibody and randomized controlled studies. But as you review the draft one last time, be on the lookout for unnecessary jargon.
Put yourself in the mindset of a reader who knows nothing about the details of your business but who just happens to have a spare million to invest in something that promises a big return. Is your plan easily understood? Just as important, is it persuasive?
If your plan absolutely positively requires technical words, consider including somewhere up front a glossary that defines these crucial terms in words that anyone, even your next door neighbor, would understand. Such a glossary will be helpful in making your plan understandable to everyone. It will also go a long way toward convincing readers that you know what you’re talking about when you throw around those high-falutin’ words.
Is my business plan concise?
It’s easy to confuse the heft of a plan with substance. In our experience, the most effective plans are only as long as they need to be, and not a page longer. The more concise and to the point your plan is, the more likely people are to read it and be guided by it.
Be on the lookout for empty phrases and unnecessary verbiage. If you find your own attention wandering as you read, look back over the section to see if there are ways to say the same thing in fewer words.
Sometimes it helps to have an outsider read and review the final draft before it goes to print. If you don’t have an in-house communications team for the task, hire a freelance editor to read and red-pencil the plan. Sure, you’ll end up spending a little extra, but a good editor can catch confusing or embarrassing mistakes that would otherwise diminish the authority of your plan.
Does my business plan strategy allow for the unexpected?
By its very nature, a plan is an attempt to tell the future — or at least describe the future that you’d like to see. Your financial forecasts, your customer and competitor analyses, and your strategic plan are all based on assumptions about the year ahead. That’s fine. But especially these days, it’s crucial to engineer some flexibility into your plan to account for the uncertainties of the economy and the marketplace.
As you review your plan one last time, be alert to places where your assumptions may be a little too cozy. Wherever possible, give your strategy and the procedures for carrying it out the flexibility you’ll need in the face of the unexpected.
What would my competitors think about my business plan?
Here’s the final test. Imagine, as you review your plan, how one of your biggest competitors would respond to reading it. You can bet they would be on the lookout for weaknesses in your strategy or glaring holes in your business forecast.
Of course, they'd welcome any missteps you might take in assessing your customers or the marketplace you hope to dominate. Wherever they sense a weakness, they’ll begin their own plan to exploit it.
Put yourself in your competitor’s shoes when you review your plan, and you may find weaknesses you didn’t recognize. Now’s the time to bolster your strategy or fine-tune your forecasts to anticipate competitors’ counter moves.