How to create a business plan that you can action right away.

Listen to this on Episode 15 of My Business Guide:

How many business owners actually write a plan?

The numbers are unsurprisingly low as many entrepreneurs prefer to "wing it".

There's a bit of controversy around business planning. Some people argue that business planning is a waste of time —entrepreneurs are better off learning as they go. While others would argue that taking time to plan helps you think through your approach before making consequential decisions. Both are correct, to some extent.

A study published in the Journal of Management Studies found that companies with written plans outperformed and grew 30% faster than those without. As it turns out, a lack of planning didn't result in a business failing, but it did slow down growth.

There's a middle ground to get it right. Research shows that planning can help businesses, but only if the following is true:

Business plans are kept simple and lightweight in the startup phase
Business plans are iterative (to stay relevant)
Business plans become more detailed as the business matures
Time is managed in the overall planning process

With that said, it's worth taking time, especially at the start of a new year, to refocus and plan ahead. And there's many ways to go about it...

What should you include in a business plan?

As a business coach, I've seen many different types of business plans: from hand-scribbled paper napkins (The Richard Branson way) through to long-winded documents (that are seldom read). I don't believe there's any one-size-fits all method for creating a business plan.

There are thousands of books written about strategic planning, vision casting and leadership, and the same could be said for business planning. You should choose a method that suits the current stage of your business.

There are a few things, however, you should consider including in your business plan:

Vision and Mission

A clear and written vision is essential for leading people. "A sound strategy is impossible without a clear vision." — says Jim Collins. We’ve written about creating a detailed vision here.

Detail the vision (including purpose, core values and beliefs)
Communicate the company mission (see Jim Collins BHAG)

Strategic Objectives

As Jack Welch says "Strategy is simply resource allocation. When you strip away all the noise, that's what it comes down to. You cannot be everything to everybody, no matter what the size of your business".

An effective business plan is one that results in action. But what action will you take? You can't do everything...

Setting SMART Goals will help you decide what to focus on. SMART Goals are Specific, Measurable, Attainable, Relevant, Time-bound. For small businesses, goals are often short-term, strategic actions that align with the vision.

‘Strategic Objectives’ are also used in more established businesses and can either serve as broad, primary outcomes that organisations aim to achieve, or they can be used at a micro level to define specific outcomes, for a team or down to an individual employee. Either way, Strategic Objectives complement goals to make them more specific and measurable.

Set SMART Goals
Outline Strategic Objectives

Operational Timeline

One of my favourite productivity quotes is from Michael Hyatt: "What gets scheduled gets done". A plan is incomplete and goals cannot be achieved until time and resources are allocated to it (the goal). An Operational Timeline is another way of saying, plan and track the following:

Strategic Objectives
SMART Goals
Launch dates
Review periods

One tool that’s helped our clients plan out a new year is 'The Compact Calendar', popularised by David Seah. This one-page calendar displays time as an unbroken flow of weeks stacked vertically without gaps, making it natural to count and track days across months. It enables efficient year-long planning on a single sheet, perfect for mapping project milestones and recurring dates during meetings.

The 'Compact Calendar' is great to track phases visually and complement your operational timeline. Each month's goals can be colour-coded or marked with specific symbols to indicate:

Planning sessions
Implementation dates
Team meetings
Major milestones

Products & Services

Overly complex product offerings drain resources and focus. Product clarity helps customers instantly understand your value. Steve Jobs demonstrated this when he culled Apple’s product line and then went on to launch the iPod. "1,000 Songs in Your Pocket"— and the rest is history.

What products or services do you provide? What market are you selling to? Who is your ideal customer? How can you leapfrog your competitors? These are just some of the key questions worth answering and clarifying on paper in your business plan. The Products and Services section of your business plan may include:

Product and service definitions and scope (we don’t do everything for everyone)
Customer profiles
Market SWOT analysis
Pricing analysis
Your Niche focus

Budget & Forecasts

A business budget forms the foundation of financial decision-making. Forecasts can help guide growth, while reporting will tell the truth about your business performance. Every business plan should include information about how finances are to be managed and expectations around revenue, expenditure and remuneration.

Financial metrics to track and report on include:

Fixed and variable operating costs (forecast versus actuals)
Capital requirements (in the next 12-24 months)
Emergency reserves
Revenue and profit forecasts (and targets)
Director payments and dividends

Tools like Xero Analytics Plus, Fathom and LivePlan can help you create financial forecasts and track performance.

Image source: FathomHQ

It's worth noting in your business plan the specific roles and responsibilities around finances. For example: Who is responsible for making key decisions, who manages tax and compliance, who does the bookkeeping and runs payroll.

Financial reviews also need a consistent cadence. For example: A weekly or monthly review of your P&L, strategic planning with key stakeholders, or a comprehensive annual review with your accountant and advisory board.

These are just some of the key sections to include in your business plan. Remember to keep your business plan simple, lightweight and iterative. Your business plan should be a living document that creates ongoing discussions within your team, is reviewed and refreshed over time so that it stays relevant and supports your goals.

Written by Lachlan Nicolson

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📚 Further Reading:

The Personal MBA

Beyond Entrepreneurship 2.0