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How long should a business plan be? How many pages? What should it cover? It covers what you need to manage your business better. Form follows function.
Consider the illustration here, which comes from my Plan-As-You-Go Business Plan book. The plan is in the big circle in the middle. The plan is what’s supposed to happen, why, who’s responsible and what that means for managing resources. It’s strategy and what you’re going to do to implement that strategy.
The other circles represent optional output formats for that plan. The output might be the formal plan document, the pitch, and so on. Be careful not to confuse the output with the plan.
The document you had copied and coil-bound to present to investors isn’t really your business plan. Don’t make that mistake. That’s just the output of the plan as it existed on that day. It isn’t your business plan any more than the picture of your kid is actually your kid. It’s a snapshot. It has changed since and should continue to change as your business grows.
You might ask if that means your plan is in your head. The answer is no; you want to keep track of the details and assumptions as they change. The most valuable result of the plan is the management it causes. If you don’t have it recorded somewhere on your computer, it’s really hard to remember later what your assumptions were, and it is therefore hard to track and manage the changes.
With this form follows function idea, the plan should exist on your computer or in whatever form makes it easiest for you (and other members of your team, if you have a team) to call it up, review it, check actual results, check changed assumptions, and make course corrections.
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