A business plan is not a catch-all blueprint set in stone. The different growth phases your business goes through demand that you prioritize different aspects of the operations. Vincent Joyner, CEO of the Zazida Institute of Entrepreneurship, shares the following pearls of wisdom to help entrepreneurs gain the most from their business plan. There are typically three phases your business will go through: the startup, the growth phase and then running/administering your business. Each of these place different demands on the business: The first is the most critical phase as it is one in which the entrepreneur is searching for the right business model. 80% of start-ups fail in the first 3 years. The business plan and processes should focus on expressing:
- Where you are getting your clients
- Where you are getting the products
- How much you can sell them for
- Which channels you use to sell them
- Identifying what you're really good at
- What you can outsource, and who you need as partners.
The business plan in this phase is really for your benefit, not outside financing partners; 95% of start-ups get financing from family, friends, and fools –not banks or venture capitalists. The growth phase is also very dangerous - with Vincent stating that 75% of companies in high growth phase fail because they don't know how to manage that growth. This could be because some critical processes and procedures in the startup phase were not implemented, or because the entrepreneur has not built internal capacity to help manage the growth. “It is important, before you get into the growth phase, to bring in people who can support you and who are good at what they're doing from a managerial, not just technical standpoint. Growth is great, but can be very dangerous," says Vincent. The business plan in this phase is designed typically to attract finance to expand the business. The administrative phase is all about business management. By this stage, the business must have clearly defined roles and expertise - from human resource through to financial management. The business should be optimized for efficiency in operations and costs. The business plan in this phase is designed typically to attract finance to buy technology to make operations more productive or acquire other businesses. Key takeaway: The blueprint for your business should reflect each of these phases and the priorities that are most important for that stage. The plan should also be preparing your operations to take the next step up.