How Business Plans for Small Businesses Have Changed

Business Plan

The stodgy business plan – that multi-page printed document that entrepreneurs would hand out at meetings with venture capitalists – has gone the way of the typewriter and Rolodex. Today, entrepreneurs are expected to lay out their strategies in slick PowerPoint presentations, complete with colorful pictures and informative charts.

Why should you care? After all, you’re a job seeker – not a small business owner. But let me remind you of the shifting employment landscape. The U.S. Government Accountability Office is now saying about 40 percent of the U.S. workforce is now made up of contingency workers  – people who don’t have what we traditionally consider secure jobs. Examples of those workers are free agents, independent contractors, agency temps etc.These types of workers basically need to consider themselves as “entrepreneurs” who continually find themselves “selling” their skills and services to new and existing employers or “customers.” That requires some type of business planning from a personal level.

How Business Plans Have Changed

Business plans have changed in at least these three ways because the 21st Century workplace is a different world than it was just 10 years ago.

Time spans are shorter. In the “old days,” a plan might last a few months without revision, but today a plan can be obsolete in a few week.

The plans themselves are shorter. There was a time when a serious business plan would run 75 to 100 pages full of validating information. All variations of business plans are shorter now than they once were. Business plans for angel investments are rarely more than 25 pages of text (not counting tables and illustrations) and can be as little as 10 or 15 pages of text. Most are presented as PowerPoint presentation.

Tools and techniques are different. A single business plan might generate a pitch presentation, elevator speech and executive summary as outputs. And, most plans stay on a network for easy access in digital form instead of on paper. Printouts are obsolete. 

But while it's true that the format of the business plan has changed, the substance most certainly hasn't. You still need to address key issues about what value you offer and to whom, in what form, and under what circumstances. You need to know the size of your market and your long-term financial goals. You need to spell out your applicable experience and your unique skills.

Sound like a job marketing plan? In many aspects it is. The University of Wisconsin, School of Business in Madison has developed a one-page worksheet called “Business Model Canvas,” featuring nine blocks, which can be easily revised as circumstances change. Here are those nine building blocks.

The Nine Building Blocks of the “Business Model Canvas”

 

1.      Customer Segments

 

Who are my most important customers?

Try test marketing your product on a small scale so you can realistically forecast how much you can sell and in what subsets in the future, suggests Edward Hess, professor and Batten Executive-in-Residence at the University of Virginia Darden School of Business

 

2.      Value Proposition

 

What value do I deliver to the customer? Why is my product/service unique and special? Does it address an unmet need?

Which one of my customer's problems am I helping to solve? What’s my long-term strategy for meeting customer needs?

"Understanding how customers are going to be found, acquired and retained is critical," says Alison Berkley Wagonfeld, operating partner for Emergence Capital Markets in San Mateo, Calif. "Some entrepreneurs might say, ‘We're going to buy search words,' but once they get somebody to their website, how are they going to sell them a product?"

"If you have direct competitors, you'll need to depict exactly how you plan to differentiate yourself. If you have no competitors, you need to explain that, too, Wagonfeld says. "It's always great to think you have no competitors, but why has no one else found this opportunity?" Wagonfeld asks. "You may have a different expertise or a unique technology," but you have to explain why you think you can retain that competitive advantage.

3.      Channels

 

How do I reach my customers?

If you plan to use social media to gain your customers, consider training programs which will show you how to locate your ideal prospects and how to build relationships with them so you can eventually “close the deal.”  See Linked University

4.      Customer Relationships

 

What type of relationship do I have with my customers?

Your marketing orientation for instance, will depend on whether you seek one-time sales or repeat orders.

5.      Revenue Streams

 

How do I make money from my idea?

Identify several ways you can generate revenue by carrying out the same day-to-day tasks so you are not tied to just a single money-making stream.

6.      Key Resources

 

What key resources do I need to operate my business?

Make a list of hardware and software as well as the services you need to run your business. Consider forming an advisory board, a small group of leaders within your field who can complement your skill sets and help you formulate your plan.

7.      Key Activities

 

What do I have to do on a regular basis to operate my business? What are my future staffing needs?

Divide present and future tasks into administrative, managerial, operating and financial activities. Which are critical during the first year of operations? Which can be added later on? 

8.      Key Partners

 

Who are the key partners that will help me operate my business?

Make a list of who does what based on skill sets and experience. Define your personal goals and your personal exit strategy for eventually handing your business off to your other key partners if that is your intent.

9.      Cost Structure

 

What are the most important costs necessary to operate my business? Specifically, what are my projected costs for the first and second year of operations?

Identify both fixed cost (foundational) and variable costs (which fluctuate according to your sales volume).

 

According to Seth Goden, whose book, “Poke the Box,” is a call to act on personal initiatives, “There are no more paper-shuffling jobs that pay $150,000 a year." Obedient cogs (in the wheel) are being replaced by individuals who are willing to be accountable and to face failure and to take an entrepreneurial approach to work. They are innovative and willing to take risks.”

What really resonates with me is Goden’s admonishment to “believe in your ability to shine a light for people and share what you know that is beneficial to others.” The key, he points out, is accumulating ideas, beliefs and information that stand out from the crowd and people find useful. That’s what I call an entrepreneurial spirit. And, if you’re an entrepreneurial spirit, you need a contemporary business plan in a format you can easily and quickly update and present to new clients or prospective hiring managers as a PowerPoint presentation.

 

 

 

Copyright © 2016. Hasse Communication Counseling, LLC. All rights reserved.

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Author Bio:

Jim Hasse (www.jimhasse.com), Global Career Development Facilitator, has compiled and edited the recommendations of HR experts and the personal observations of both jobseekers and hiring managers into Perfectly Able: How to Attract and Hire Talented People with Disabilities (www.perfectlyable.com/), a comprehensive disability recruitment guidebook for hiring managers published by AMACOM (September 2010), the publishing arm of the American Management Association. He’s the founder of www.cerebral-palsy-career-builders.com, a comprehensive career coaching guide for parents of youngsters with cerebral palsy, and owner of Hasse Communication Counseling, LLC, which develops win-win direct mail fundraisers for champions of disability employment.