What is your plan?
Do you remember the countless people who asked you this question around the time of graduation, when you were getting ready to quit that first job, or start your next company? Creating a plan is an extremely beneficial activity as it helps us clearly articulate our intention or decision. As an entrepreneur, I find that having a plan in place is extremely helpful since it continues to remind me of the activities I need to do to reach the target I am aiming towards. In this blog post, I’ll be reviewing three types of plans that entrepreneurs use to build their business, the pro’s and con’s, and conclude with my ultimate recommendation for creating your plan. Before diving in here, I wanted to bring up that sometimes the word “business model” and “business plan” are used interchangeably. A business model is defined as a design for the successful operation of a business, identifying revenue sources, customer base, products, and details of financing. So basically, a business model is a business plan.
💭 The Intuitive Plan
When I first started my business, I had no idea what I was doing. Some would say this is normal. They might even call me a “Newbie.” The psychologists would say I was facing “imposter syndrome,” as I attempted to sell my services. My spiritual friends would tell me that I wasn’t grounded in my truth. Everyone was right. At the core, my low-levels of confidence didn’t allow for my intuition to flourish. A few months into my new adventure, I found myself working with health coaches, yoga teachers, and spiritual healers. People who heavily relied on their intuition as their “plan.” Externally, they were teaching clients the importance of using yoga, meditation, and other mindfulness techniques to develop their intuition. Internally, they confided in me about how the lack of a plan in their business created lots of stress. The intuitive plan does not exist. While intuition is a key tool that entrepreneurs have to remain calm and in the flow of life, it does not translate into structure around objectives, marketing plans, sales processes, etc... These fancy terms are most often related to what is affectionately known as The Business Plan.
💼 The Business Plan
The “Business Plan” is often associated with the lengthy documents portrayed in movies about bankers and lawyers investing in companies. At a high level, these documents are used to articulate the goals of a business and the approach through which these goals will be achieved. The plan will also include a Market Analysis, marketing strategy, operations plan, financial projections and a budget. These detailed documents break down the costs of pursuing these goals within a specific time frame to generate a Return on Investment. Detailed Business Plans are most often used by venture capitalists, banks, and institutions to assess their investments into more mature enterprises. Serious investors want to understand that the teams managing companies are already aware of any risks present in the business model, before they pour money into them. While entrepreneurs are taught that it is critical to have a plan, these lengthy plans are not always suitable, since they are still experimenting with product-market-fit, growing a team, and dealing with the constant change. For emerging businesses in their first 0-5 years, a more suitable option for a “Plan” is available. That is called the Business Model Canvas.
📄 The Business Model Canvas
Invented by Alex Osterwalder, the Business Model Canvas is a 1-page summary that contains a visual representation of your business model. The Canvas is made up of 8 parts, and is divided into 4 sections. For reference, here is what it looks like:
While the Canvas contains several sections, the intention is to keep a few bullet points about each area. The benefits of using this option is that it allows us to summarize our entire business model on 1-page. You can even bring it to a dinner party and teach a crowd of people about what you do with just 1 slide. Although drawbacks include the fact that it’s shallow in terms of having room to delve into the details, entrepreneurs require nimble tools that can evolve alongside them and their business. If you are starting a new business, I highly recommend that you begin your journey with creating Business Model Canvas. If you are unsure about how to go about doing that, you can sign up for our training workshops where we teach you the step by step approach to going through this process.
Thanks for reading, Ernesto
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