People are always asking us for examples of business plans, which is a bit ironic, in that every credible plan I’ve ever seen has “Confidential” stamped all over it. That said, there are samples out there, which is fine as long as you don’t assume you should do it the way they did it.
Here are some good places to look for sample business plans:
Palo Alto Software offers more than 100 free plans in 28 different categories. The plans are truly free; their hook is that if you buy their Business Plan Pro software, you can import any number of these plans and edit them to get a good start on your own plan; or use any of the 500+ plans that come with the software.
SCORE, the business advisory nonprofit organization with services delivered by volunteers, provides about a dozen business plan templates.
Entrepreneur lists more than 50 sample business plans in many different sectors.
Center for Business Planning provides business plan “winners” from their Moot Corp Competition, which simulates entrepreneurs asking for funding. MBA students prepare the plans.
About.com provides a fictional “professional” plan “with exceptional graphics and formatting” with (gulp) ten appendices. Their Critical Steps for Business Planning is worth taking a look at also.
The Bridgespan Group offers several sample business plans for nonprofit organizations.
Unfortunately, there is no standard business plan format. Use these samples, and the suggested reading mentioned in my previous blogs, to inform your thinking. Then create a plan (or hire a consultant) that works for your market, for your business and for you. Good luck!
Organization and management sciences today are placing a great deal of attention to naturalistic approaches to development. One of the most prominent approaches is called “self-organizing” systems. These are systems that develop primarily according to certain values, rather than according to specific procedures.
Biological systems (people, plants, animals, etc.) are fine examples of self-organizing systems. They might grow in any variety of ways – ways which are rarely sequential in nature. However, these biological systems always develop according to certain key principles or values, such as propagation of their species and self-preservation.
Contrast to the Traditional Approach to Strategic Planning
Contrast that naturalistic, unfolding approach with the traditional approach to strategic planning, which is usually linear, or sequential, in nature. In the traditional approach, planners might:
First identify broad mission, vision and/or values statements
Conduct a situational analysis involving external and internal assessments
Establish broad goals in accordance with the mission and results of the assessments
Identify strategies to achieve those goals (small organizations often skip these strategies)
Develop specific action plans (objectives, schedules, responsibilities and resources) to achieve each of the goals.
This linear approach is not well suited to all types of organizations. Some organizations might prefer a more naturalistic planning process that allows all perspectives and activities in an organization to unfold over time. This planning process might be deemed “organic”, that is, it emerges like that in natural systems, such as plants, animals and people. Some might prefer to call it “holistic.”
What is an Organic Approach to Strategic Planning?
This is a rather unconventional approach to planning – certainly, an approach that some might argue is not strategic at all. However, the value of this approach is that it can match the nature of certain types of organizations much more closely than the traditional, linear approaches. It might even be argued that the linear approaches can even hurt these types of organizations as their members struggle to conform to a planning process that is quite contrary to their nature.
Step #1: Clarify stakeholders’ vision and values
In meetings of perhaps half a day, stakeholders clarify their common vision and values. Here are various methods to clarify vision and values. The types of stakeholders depend on the purpose of the planning. For example, neighborhood development planning might include members of the neighborhood, potential funders and community leaders.
Step #2: Each person establishes personal action plan
At tables of 4-6 people each, each person identifies a relevant and realistic action that he/she can take, and by when, in order to work toward the vision and according to the values. Actions might be derived from telling stories about “the best time that we …” or “my wish is that …” This approach is well developed in the emerging field of appreciative inquiry.
Step #3: Each person reports results of actions; all update vision and values
In the next meeting, at each table, each person reports the results of his/her actions, including progress toward the vision and any learnings that he/she gleaned. After each person has reported, a spokesperson for that table shares a summary of the actions and learnings with the entire group.
The group can use the same process used in Step #1 to update the vision and values based on the results of the actions and the associated learnings.
The group repeats steps 2-3 until the group agrees sufficient progress has been made toward the vision.
When Should Organic Strategic Planning Be Considered?
Organic strategic planning might be suited to your planning if one or more of the following is true:
The vision for your organization and its stakeolders applies to a large group of people, and might take a very long time to achieve.
The effort to achieve the vision might involve lots of very diverse people.
The culture of the organization is quite averse to conducting orderly, sequential activities.
The role of vision and values in your organization is extremely important.
The culture of the organization highly values the working from the positive and telling of stories.
If your organization expects funding from investors or donors, it has confidence that it can obtain that funding without presenting a conventional strategic plan document with goals and strategies.
The focus of the process needs to be on the interaction among stakeholders as much, or more, than on achieving certain, specific results.
The principles of strategy are timeless. The following notes on the essentials of strategy are drawn from the great works of strategy… Sun Tzu’s The Art of War, Napoleon’s Maxims, Clausewitz’ On War. Though dating up to 2,500 years ago, the advice of these strategists is helpful today no matter your competitive landscape, from high tech to agriculture, from manufacturing to government.
1) An effective strategy is deeply understood and shared by the organization.
Genghis Khan’s Mongols defeated far larger armies because they were able to make adjustments on the battlefield despite ancient systems of communication that limited the way orders could be delivered to warriors already in action. The secret was instilling battle strategy in the hearts and minds of all soldiers so that they could make correct tactical decisions without direct supervision or intervention.
Like the mission statement published in your annual report or guiding principles framed in your lobby, a strategic plan itself accomplishes nothing. What matters is whether the people of your organization understand and internalize the strategic direction you have articulated and can make tactical choices on their own. Strategic plans must be articulated in a manner such that operational and tactical decision-making can follow suit.
As a strategist, you must count on the employees or members of your organization to make sound tactical and operational decisions that are aligned with your desired strategic direction. To ensure that these decisions are well made, your articulated strategic direction and strategic plans must be applicable and clearly related to the issues that people face.
Remember that an effective strategy provides a picture of the desired long term future. In order to make sound day to day decisions, all members of the organization must be able to begin with the end in mind. All steps must ultimately keep the company on course toward the long term objective.
2) An effective strategy allows flexibility so that the direction of the organization can be adapted to changing circumstances.
Watching the rise of Napoleon’s French empire in the first decade of the 19th century, the Prussian generals were anxious to do battle with Napoleon’s army because their soldiers were highly trained and disciplined in battle tactics that had succeeded for Frederick the Great fifty years before. It turned out, though, that the Prussian army was designed to fight “the last war” while Napoleon’s innovations, including soldiers carrying their own provisions instead of the supply train of impedimenta typical of the traditional European armies, allowed Napoleon’s troops to react and adapt to conditions far faster than could the Prussians. When the Battle of Jena–Auersted occurred in 1806, Napoleon’s army out-maneuvered their slow and plodding enemy and destroyed the Prussians in that pivotal confrontation.
A rigid strategic direction seldom turns out to have been the best course of action. To assure that your business is nimble and able to react to changes in the marketplace, it is essential that your strategy is flexible and adaptable. As a strategist, you will count on timely and accurate information about market conditions. It is essential to build and employ effective mechanisms for observing and listening to what is going on in the competitive environment. Real-time information, in turn must feed on-going strategic and operational shifts and deployments.
3) Effective strategy results from the varied input of a diverse group of thinkers.
Abraham Lincoln used the language of empathy and metaphor to communicate strategy to the Amercian people.
Moreover, participants in strategic decision-making must be unafraid to state contrary opinions. In Doris Kearns Goodwin’s excellent book Team of Rivals, she explains how instead of bringing in a cadre of leaders whose thinking closely matched his own, Lincoln made a point of surrounding himself with his political rivals, naming William H. Seward, Salmon P. Chase, Edwin M. Stanton, and Edward Bates – all of whom had opposed Lincoln in a bitterly fought presidential race – as members of his cabinet. Despite initial misgivings, this unlikely team learned that Lincoln valued their opinions, would consider and reflect on their disagreements and challenges, and would not stick unnecessarily to preconceived notions. Though the mix of personalities and opinions inevitably led to debate and verbal conflict, Lincoln was able to facilitate and mediate, tapping into a rich variety of ideas in order to find the optimal solution to political and military issues. Goodwin attributes this ability to manage disagreement and lead an effective decision-making process as perhaps Lincoln’s greatest strength as he led a troubled nation.
To ensure that your strategic team is ready to make effective decisions, look carefully in the mirror. Do you encourage debate, even argument, among your team about key decisions, or do you encourage toeing the company line? Remember that the well documented occurrences of groupthink – Kennedy’s ill-fated bay of Pigs invasion, NASA’s decision to launch the Challenger space shuttle, Bush’s reaction to presumed weapons of mass destruction in Iraq – occur not because of oppressive or stifling leaders. Rather, groupthink tends to occur when leadership groups enjoy collegial and fond relationships, leaving deliberants unwilling to rock the boat, or to voice contrary opinions.
4. An effective strategy follows a thorough and deep analysis of both the external environment and the internal capabilities of the organization.
This is the essence of the famous SWOT model (Strengths, Weaknesses, Opportunities and Threats). The strategist must understand the effects and dynamics of external entities such as competitors, suppliers, regulators and strategic partners. A sound assessment of these external factors leads to a rich understanding of threats to ward off and opportunities to pursue. The strategist must also understand the internal capabilities of his or her organization. A realistic self assessment enables the organization to leverage the strengths of the organization and to shore up areas of weakness.
To take advantage of intelligence gained through a SWOT analysis, the strategist must ensure that intelligence does not sit idle, but is immediately mined for insight that can be used in strategic and operational decision-making. All historical stories of the great strategic achievements of history – from D-Day and the Normandy invasion to Napoleon’s greatest campaigns – include anecdotes of decision-makers poring over maps and data and striving to find the optimal course of direction and events.
5. An effective strategy identifies areas of Competitive Advantage
Writing in The Art of Wart of War some 2,500 years ago, Sun Tzu postulated two dialectic forces: Zheng is the “ordinary” element that fixes the enemy in place. Qi is the unexpected and devastating blow. Qi is indirect, unorthodox, extraordinary. Qi does not work, though, unless Zheng is able to hold the opponent in place until the decisive blow is struck.
To put this in the context of today’s competitive dynamics, understand that many aspects of business must be held at parity across a wide swipe of the competitive landscape. In business, this is called the “business essential” elements of organizational design. You don’t need to be world class at mundane business practices that are not your distinctive competence, but you must maintain standards of work equal to that of your competitors. That is, the organization must maintain parity with competitors in the ordinary and mundane matters.
But at the same time, every successful organization is able to explicate an audacious Qi or extraordinary force. You must be world calls at something that differentiates you from the competition. Moreover, all members of the organization must keep the uniqueness of their company in the forefront, always keeping competitive advantages unharnessed in order to compete in a vigorous manner. In short, every strategic plan must educate the full organizational team how it must use carefully identified competitive advantages in order to compete and win.
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Mark Rhodes is a highly experienced organizational strategy and design consultant with Strategy By Design. You can reach him via email at markrho@mindspring.com.
Sometimes the best things in life are free. So if your preference is to find out what’s available on the web before investing in a business planning book (see previous blog entry for a list of books), here’s a quick list of ten “best” business planning web sites.
My next blog will indicate where you can find sample business plans.
Ten Painless Steps to Starting and Finishing Your Business Plan. Some good tips on how to go about researching and writing your plan.
Creating Your Business Plan, which also does a good job of outlining how to frame and get to work on your plan.
What Is A Business Plan?, from Palo Alto Software, the maker of the top-selling Business Plan Pro software discussed in a earlier blog. They also have a section called How To Write A Business Plan worth checking out as well.
There’s a wealth of information in these websites, some of it contradictory, which is part of the nature of relying on free business planning advice. So if you’re serious about creating a business plan, you’ll probably want to buy a book and possibly some software as well, but these sites should help you get started. Good luck!
Finding a good business plan book can be overwhelming. Type “business planning guide” into Amazon and you’ll get almost 5000 citations. Your local bookstore or library is more selective, but it’s still hard to sort through them.
And, truth be told, there’s no one book for everybody. So, for that reason, we’ve listed the “best” business planning books in three categories. (Full disclosure: I’m the author of the last book.)
“Best” General Business Planning Book
The Ernst & Young Business Plan Guide by Brian Ford, Jay Boorstein, and Patrick Pruitt (2007), is a solid, competent book that will help you create a solid, competent business plan. Written by accountants, it might not be inspiring, but it’s a good “how to” book for getting started.
“Best” Business Planning Book for Finding Investors
There are two books in this category. Raising Venture Capital for the Serious Entrepreneur, by Dermot Berkery (2008), is a comprehensive guide on how to attract investment dollars. Written for a business school class, it’s thorough to a fault (all 288 pages worth), but you’ll find it worth the time you spend reading it.
Angel Financing for Entrepreneurs, by Susan Preston (2007) describes how to create a compelling ten minute PowerPoint presentation to attract angel investors. It’s also used in business school classes, but does not address how to write a business plan; for that, you’ll need one of the other books too.
“Best” Business Planning Book for Social Enterprise
Venture Forth! by Rolfe Larson (2002). Endorsed by Paul Newman of Newman’s Own, this book provides instructions on how to write a compelling and complete business plan, and includes detailed examples and case studies. Written for nonprofits, it’s been used by numerous for-profit entrepreneurs as well.
Few plans are implemented as intended. That’s one of the reasons that people lose faith in planning. They expect their plans to be implemented exactly as described in the plan. One of the unfortunate aspects of this situation is that many consultants assert that “planning doesn’t work.” It does work when it’s done well.
During Planning, Clarify How to Change the Plan Later On
When doing the planning (when identifying goals and other priorities to address and how to address them), also talk about how to change your plan as it’s being implemented in the future.
A good approach is to require that any changes be approved by the Board if the changes might be to the overall mission, vision, values and top-level goals, but not to the action plans. (Action plans usually are about how each goal is to be achieved.)
Include a Date on the First Version of the Plan
When the Plan is approved by the Board, be sure the cover of the Plan includes the date of approval. Include that date on each page of the Plan.
Include a Revision Page Near the Front of the Plan
On that page, list the original date of approval of the first version of the Plan. Then for each approved change, on the Revision Page, list the date of approval of the change, and the pages that were changed and how.
Update the Revision Date On Each Page of the Plan Document
For example, on each page, put the last date of approval of the last change to the content on that page.
If Frequent Changes Are Made, Produce a New Version of Plan
If changes are made, for example, more than once a quarter, then produce a new Plan document that includes all the approved changes, and on the cover of the Plan include a new date. On its Revision Page, explain that a new version was produced and reference the previous versions.
If Changes Require Board Approval, Re-Issue to Stakeholders?
If changes were to top-level, strategic matters (mission, vision, values and goals), and you had issued copies of the Plan to various stakeholders, then consider issuing a new version to them as well, along with descriptions of why you produced the new version.
A plan should be a set of guidelines to follow during the year. The Plan should not be considered as a law or regulation.
What do you think?
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Carter McNamara, MBA, PhD – Authenticity Consulting, LLC – 800-971-2250
Read my weekly blogs: Boards, Consulting and OD, Nonprofits and Strategic Planning.
In a world with dynamic markets and fickle customers, it’s best to build into your plan strategies to respond quickly to new opportunities and threats. Long gone are the days when you could just create a valuable product, price it to attract customers while making a profit, and then just keep doing the same thing year and after.
Today, that’s a formula to go under before your banker invites you to the annual golf outing. And that’s assuming anyone will put money into your business in the first place, which is unlikely if you can’t convince them that your business will adapt quickly when the reality of your business plan meets the reality of the marketplace.
So how do you build adaptability into your plan? First, do your homework so you come out of the box with a solid plan with real world assumptions, but also create systems to keep gathering that data to test those assumptions. Successful entrepreneurs keep collecting data about their customers, competitors, supply chain, industry trends, and so on long after they’ve written their business plan.
Then they act on it. Be sure your plan includes a management structure that enables quick decisions, without more process than is needed to properly vet things.
One way of looking at the CEOs job is s/he needs to be constantly disrupting things as a means to achieve that kind of adaptability.
A recent Business Week article describes successful CEO’s who intentionally disrupt the status quo, their own business models, and institutional analysis paralysis; that’s when slow moving organizations seek complete clarity before acting. For most important business decisions, that’s too late. Your goal should be to understand just enough about the problem to make your next decision.
It might be the wrong decision sometimes, but often there are even greater risks from inaction, moving too slowly, or just taking too long to act.
So make sure you build decisiveness into your business plan.
Over the years, I’ve noticed that when things get really tough or it’s difficult to identify strategies during planning, there are always three strategies you can try. My clients seem to love it when I describe the Solution to them. Try it yourself.
Strategy #1: Try Get More Resources?
This is the most popular, but usually the least successful and the most maddening. This strategy, more than the other two, usually results in working harder, rather than smarter. Inexperienced leaders usually prefer this approach, thinking that if only they could get more money or more people, then they’d throw more quantity (not necessarily more quality) at the problem. Experienced leaders usually opt for one of the other strategies.
Strategy #2: Extend Deadlines to Get Things Done?
Ironically, this is the approach that’s most frequently used – and used by default. Regardless of our plans in life, reality usually overtakes them – and we become so busy doing other things, that the deadlines in our plans tend to slip. Sure, we lament that deadlines have slipped (if we even admit that to ourselves), but still we’re a little relieved – and surprised to realize the world hasn’t crashed around us.
Strategy #3: Reducing Our Expectations?
In today’s hectic and goals-based world, even the mere mention that we should do less very often evokes strong reactions from others, especially from bosses and collaborators. “Well, aren’t you a leader? Then do more with less! Motivate yourself and your people!” The irony is that very experienced leaders have learned that you’re often far better off to do a few things very well, than continue to live with the continued frustration and disillusionment over unsuccessful attempts to reach unachievable goals.
So the next time you’re in a tough situation, think of these three strategies – what I call the “Sanity Solution”. Think especially about strategies 2 and 3, and live a longer and saner life.
What do you think?
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Carter McNamara, MBA, PhD – Authenticity Consulting, LLC – 800-971-2250
Read my weekly blogs: Boards, Consulting and OD, Nonprofits and Strategic Planning.
Writing a business plan takes time. Using software can help organize your work and save you some time, especially if you haven’t written one before.
Here’s a quick summary of what, from my experience, are the three best choices:
Business Plan Pro by Palo Alto Software claims it’s the best selling business planning software for the past ten years. It offers more than 500 sample business plans. Standard Edition sells for $100; Premier for $200 (allows managing cash flow and importing Excel content)
Business Plan Pro Social Enterprise Edition was developed by the Social Enterprise Alliance in partnership with Palo Alto Software. It’s contains everything in Business Plan Pro along with business plan examples from social enterprises. It sells for $200 ($174 for SEA members).
BizPlan Builder by JIAN has versions available for Mac or Windows, is also highly rated and sells for $129.
Can’t decide? Take a look at this review of ten different business planning software programs to help you pick the one that’s right for you.
But remember, these are only tools. Ultimately you have to do the research, make the important decisions, and write your plan. Software can only do so much.
Far too often, organizations choose the wrong approach to strategic planning. As a result, strategic plans sit untouched on shelves and planners become even more cynical about the strategic planning process. This occurs especially with 1) new organizations, 2) organizations having many current issues, and 3) organizations having very limited resources. Here’s how to fix the problem.
What’s Goals-Based Planning?
Goals-based (or vision-based) planning works from the future to the present. Planners pick some time into the future and then suggest specific goals to be achieved by that time. Often, goals are specified in terms of specific accomplishments, for example, achieve to 1 million in sales revenue or a 20% profit rate at the end of the next three fiscal years.
Hopefully, planners also associate actions plans with each goal. Action plans clarify who is going to do what and by when in order to achieve the goal. The planning process might also include clarifying the mission statement, and even scanning the environments external and internal to the organization in order to identify priorities to address in the plan. Goals-based planning is usually based on a rather long-range plan, at least 3-5 years into the future.
What’s Issues-Based Planning?
In contrast, issues-based planning starts from the present and works to the future. Planners identify major issues facing the organization right now. It’s best if issues are described as questions, for example, “How will we activate our Board of Directors?” or “How can we manage our finances much more effectively?”
Then planners specify action plans about who is going to do what and by when in order to address each issue. They might scan the external environment, but they focus especially on the internal environment of the organization in order to ensure the organization accomplish strong internal systems. Issues-based planning usually produces a plan with a short time range, for example, one year.
Which Approach to Planning Should I Use?
If your organization is 1-2 years old, has many current issues and/or has very limited resources in terms of people and funding, then you should strongly consider doing issues-based planning for now. Then, after a year or so, after you’ve implemented your issues-based plan, your internal systems will be much stronger and ready for doing more future-based planning.
An added benefit of issues-based planning is that it usually gets much stronger buy-in from planners because their minds are not ruminating on current major issues, while they’re being asked to fantasize far-reaching goals that might result in even more issues to address very soon.
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