It always frustrates me to look over someone’s business plan, and find it missing key components to make it useful. And by useful, I mean both actionable – detailing the steps you should take through the year – and evolving to show progress over time. I’ll explain why it should fulfil both of these functions.

With actionable details, the plan becomes a roadmap – a step by step guide in how you intend to achieve the goals set within the year’s plan. It can be a document you reference through the year to help determine next steps, and measure progress by activity, not just year-end results.

A business plan which includes both the planned goals and results achieved in previous years gives you a track record. That track record is going to help determine sale value of your company if you should elect to sell. It also allows you more freedom in setting non-revenue goals. Too many people get caught up exclusively in increasing revenue, and not focusing on developing infrastructure and staff, reducing risk, and managing customer satisfaction and retention.

So start by considering why you want a business plan. You don’t need pro forma financials if you aren’t looking for financial help. But you do need a business development plan which details how you will get business. And that plan needs both a strategic approach, and detailed tactics. Those tactics are the actions you need to take. Making significant progress through the tactical steps can advance your business as much as reaching the financial goals. And where the activity is replicable, you establish infrastructure. Infrastructure, whether in processes like these or systems and equipment, become saleable assets.

I’ll write much more in the next blog, but want to add one last thought on the amount of detail in your plan. It’s fine to give a bird’s eye view of the market as a whole, but you also need to focus this down to the addressable market under current conditions. One of your initiatives may be to increase the addressable market by adding new capabilities, but you need to understand what you can reach right now. Don’t bother writing reams about competitors out of your league – focus on those closest to you in size and scope. Make the detail included in your business plan defining detail – not just filler.

More to come. Happy 2013.

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