Entrepreneur Business Plan, is it worth it?

In today’s world, there are endless opportunities for individuals to break out on their own and start a business.   Today’s world with technology makes it easier than ever to start your own business or freelance skills that you do well.   The biggest question that I get asked by many individuals is, “business plans, are they really required?”  The short answer is yes!   It would be best to have a plan in place before you take on any venture, both professional or personal.   The approach you might consider creating your entrepreneur business plan might be different from what you might think.

Entrepreneur’s business plan is it really worth my time?!?

I will repeat it… YES!  A good entrepreneur business plan will help you focus on getting your thoughts in place and allow you to decide how you want to execute your newly thought-out idea.  I tend to find that many people think they need to create a formal presentation out of their business plan to get started.  This is not true.

I tend to see that business plans are often a barrier for most people as they are afraid to even start with their vision and plan.  There are some key considerations that an individual should consider when building their plan.  Just keep it relaxed, informal, and keep it real.   Decide where you want your business to go and how you want to get there.

Business Plans for 2020

The last thing that I advise you to do is start your entrepreneur business plan by opening Microsoft Word and looking for the template for a business plan.   There are too many informal business plans, and you really do not want to start with a 50-page plan on how you will start your business.

Consider starting your business plan with these 7 sections, and build your plan out as your business grows.

  1. Vision
  2. Reality
  3. Assumptions
  4. Execution
  5. Contingencies
  6. Audience
  7. Money

If you break your plan out into these seven sections, you will cover the core plans of starting your business and give you a good foundational focus to move your plans forward.

Vision

The first portion of your plan will be the Vision section of your business plan.  This part can be enjoyable as this is writing down what you want to accomplish with your new venture!   Don’t make your vision “to make money while providing [fill in the blank] service.”   That is self-serving and not the purpose of your business.

We are all starting a new venture with the eventual goal of making a living while doing something we enjoy.  Instead, look at it from the perspective of how you can provide value to someone else.

A good example of this might be “Improve my local community by providing the highest quality [fill in black] service” or “Save people time through using my [fill in the blank] app.”   The main point is that you want your vision to be focused on how the new venture you are starting will benefit others, not you.

Reality

Part two focuses on keeping it real and thinking about what is going on in the world right now.   How will the reality of today affect your venture?  There is an array of questions that you will want to ask yourself.  You will want to write down the truths of now and what you believe the truths of tomorrow.

Common questions you will want to answer in this section will be things like:

  • What is the market like today?
  • Is there a demand for what you want to do?
  • What are your competitors doing?
  • Are your competitors successful?
  • How are others winning?
  • Who has failures and what didn’t work?
  • What is the economy like today?
  • Are there industry standards of what I want to do?
  • What technology is available today?

Remember, in this section, you want to keep it honest and real.  State the facts, do not state what you want things to become.   The more detail you can provide your statements of reality, the better.   Do not go overboard, but provide yourself enough time to think through the realities of what you are considering doing.

Assumptions

Section 3 focuses on assumptions that you will make with your plan.  It is a given when you are first starting and you are building your plan that you will not know everything right upfront.   That is okay!  It would be best if you thought about what things in your plan are factual truths, and parts of your plan are assumptions you are making.   Assumptions are not a bad thing at all.  You must recognize the major difference between what assumptions you are making versions what is clearly & deeply researched data.   We will save the fact-finding missions for later when you are actively executing on your new venture and need to formalize your processes.

Audience

The fourth part of your plan should be based on understanding your audience or the people you want to serve.  You will want to think about all aspects of your ideal customer and what makes them tick.

Think about it, and you would not want to be selling knitting tools to a logger? Most likely, your answer would be no to that question.   You want to have a good idea about what are things about your product, process, or service that would make people want to choose you over your competitor?

You will want to think about several aspects of this audience profile that you will be building.

Demographics:

  1. What is the age group of my audience?
  2. What is the sex of my audience?
  3. Religious beliefs?
  4. Nationalities?
  5. Income levels?

Interests:

  1. What other things would your audience be interested in?
  2. Common behaviors of your audience?
  3. What media are they influenced by?
  4. Core values?

Physical Traits:

  1. What does your audience look like?
  2. Do their physical traits influence their decisions?

You can keep building off some of the ideas that I have listed above, but the main goal is to envision your audience.  This will help you understand what your marketing efforts will focus on in the future.

Execution

The execution section of your plan will probably be the most intimidating portion of your plan.   During this part of the plan, you have to think about how you will get where you won’t go!  The good thing is that you have already thought about what is are the realities about what I want to do, what you are assuming, and what your audience should be.

The easiest way to start your execution plans is to approach them with cause and effect.  Write down your execution in the format of “If I do X action, then Y will happen.”  This will help you plan for what parts of your execution will be well spent and what parts will be lower in priority.

It is good to put a cost and timeline to each of your actions to have a clearer picture of how you are going to get where you want to go.  When making your execution section of your plan, your execution sections should look something like this:

            “I will complete V action, and X will happen.  It will cost me Y and I will have it completed by Z date.”

Contingencies

The sixth part of your entrepreneur business plan will be thinking about what you should be doing when things do not go according to plan.   Yes, you are reading that correctly.  You are planning when plans don’t go according to the plan (say that 5 times, fast!).

Most of us want to believe that there is only one way to get to the finish line, but there are multiple options for achieving your goals in most cases.    You will want to create a list of different ways to achieve your execution plan (section 5).

You will come up with some additional creative ways to achieve your plan, and you will come up with some not-so-great ideas in the process too.   The important thing is that you plan for an alternative approach to achieving your venture.  After all, you are investing a lot of time and energy in your new plan. Consider all ways that it can be successful by thinking about your contingencies!

Money

The last part of your plan should focus on the money portion of your new business.    You may not be an accounting expert, but you will want to consider some key considerations of the money portion of your new business.   Here are some questions to consider when planning out your new venture.

  1. How much money do you expect to make?
  2. What expenses will incur?
  3. Do I have enough to get started on my own, or do I need a loan to get started?
  4. What are my expected profits?
  5. When will I start making more money than I spend?
  6. What are the differences between my expenses vs. income (margin)?
  7. When is my plan if something is costing me too much money (exit strategy)?
  8. What will my overall financial health look like when comparing profits, expenses, assets, and liabilities (balance sheet)?

Writing out the costs will help you plan out what you can do in different phases of your plan and help you understand the overall money aspect of your new path!

Summary of the Entrepreneur Business Plan

Creating an entrepreneur business plan is an important part of starting a new venture. You don’t have to be overly formal about the whole process. The most important part is taking time to think and plan where you want to go.

            “Failing to plan is planning to fail”

Many people do not take the time to create a business plan and find that they will be faced with unforeseen challenges.   You will be one step ahead of the most entrepreneur by creating a business plan and making plans to succeed.   You will just be doing this by taking a modern realistic approach to your new business.

Wes Durham

Wes Durham is the founder of Develop Your Wealth. He has a long-running career is a mix of financial technology and education. His main goal is to help others develop good saving habits, money earning opportunities, debt balancing and wealth development.

This Post Has 2 Comments

  1. Doug

    For me, I was definitely scared to follow through in creating a business plan when I started my hiking supply business in 2005. I had a lot of naysayers and those that just said “get a real job” but the fire inside me was burning to follow my heart in owning my own business. It’s important for a lot of those starting out to block out the negativity and either focus on working with your ideas yourself or surround yourself with like minded people.

  2. Jack

    Everyone needs a business plan, even if it’s a tiny startup you are forming out of your garage!

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