What is it?
A business plan is a solid and convincing written document presenting a project, often entrepreneurial. It gathers any studies and assessments you’ve conducted to see your project through into a single document and contains factual elements and precise financial figures.
A business plan is widely considered as an essential presentation tool for winning over the partners a project needs (associates, bankers, investors, suppliers, etc.), although it does have certain other purposes:
- For you as an entrepreneur: an analysis tool, a real roadmap that can help take stock and be used as a reference point for whatever happens in the future;
- For the company: a tool for management, forecasting and planning that will guide you in organizing the means being mobilized and serve as a dashboard.
How does it differ from a business model and what tool to use?
A business model, also called “economic model,” specifically described how your entrepreneurial activity will generate revenue. In concrete terms, that means defining what you will, to which clients, for what purpose, in what manner and for what benefit. It is one of the pillars of your startup project, and we recommend using the “value proposition canvas” followed by the “business model canvas” to draft it.
Thus, your business model is at the heart of your business plan. It is closer to the concept than to forecasting. As for the business plan, it’s in fact an operational roll-out of your business model in written form and complete with figures. Practically speaking, a business plan should never be drafted before the business model has been clearly defined!
Do note that the business model and the business plan are complimentary. For instance, if you change a key element in your business model (such as the distribution channels), you will also need to adjust certain things in your business plan (in our example, your marketing strategy and budget). Consequently, the business plan is not a static document: it is iterative, living and bendable, as is the business model. Its structure will evolve throughout the creation and development stages of your project.
Is it necessary to draw up a business plan for an entrepreneurial project?
No! Putting a full business plan on paper is not indispensable for a startup to succeed. Winning over your first customers and making your first sales is always more meaningful and tenable than showing someone a theoretical document without any concrete results, no matter how well written it is. That’s why entrepreneurs say that in a “business plan,” the business always comes before the plan…
You’re probably wondering: so am I wasting my time drafting a business plan? The answer, again, is no! As long as you’re doing it for the right reasons. If you want to write down your project, structure it, synthetize it and set the figures, we definitely recommend seeing this through because it will consolidate your project. Also, if you’re seeking financers, a document like a business plan could be decisive in your efforts.
But a business plan shouldn’t obstruct your progress toward launch by making you overthink, spend too much time polishing fine details and making medium to long-term forecasts when things change so (so) quickly. It’s a matter of balance…
In a short time, we will be publishing another article laying out the different components of a business plan, points requiring special attention in the drafting phase and a few links to templates and other tools to help you draft your plan. See you soon…
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