The working business plan

For an existing company a business plan is not a funding document. It is a written answer to three questions: what the business sells, to whom, and what has to happen next.

The short version that gets used

1. PositionWhat the company sells, to which group, and why they buy here rather than elsewhere.
2. ChannelsWhere orders come from now, in shares, and which channel carries the risk.
3. EconomicsMargin per product group, cost to acquire an order, and what is left after both.
4. OperationsHow an order becomes a delivery, and who does each part.
5. Next twelve monthsFour or five things that will be done, with a date and an owner for each.

Why the long version fails

A forty page plan is written once and read never. It ages badly because the detail is in the parts that change fastest: channel tactics, product ranges, platform features. A short plan with a longer appendix ages better, because the appendix can be replaced without rewriting the argument.

The test is practical. A plan that cannot be summarised in one page has not settled what the business is for.

The part most plans skip

Almost every plan describes growth. Very few describe what happens if the largest channel loses half its volume. That paragraph is the one an outside reader, a bank or a buyer turns to first.

Keeping it alive

A plan reviewed once a quarter against actual figures stays useful. A plan filed after writing becomes a historical document within two quarters. The review takes an hour and consists of three columns: what was planned, what happened, what changes as a result.