It’s a delicate ritual.
Ideally, no-one does the business plan better than the entrepreneur/owner. In reality, most business owners from emerging markets couldn’t be bothered with a written plan; they feel comfortable with the business idea in their head. So, it is naturally the job of the JIA to write the business plan.
Here, the JIA who most likely come from finance/economics background may need to rewrite vision & mission, perform market research, technical product evaluation, strategic planning, develop sales & distribution strategy, marketing plan, human resource capability grading, business risk management, define new KPIs, and a plethora of things s/he never learned during the last internship, nor finance school.
However detailed and elaborate a plan is, I found from my experience the essence of an effective business plan boils down to the following points:
- Describe the problem and the product in one slide.
- Describe the business model in one diagram.
- List the key competitive advantages in 3 sentences.
Business plans are staged in milestones; milestones depending on the business model, R&D, market, and when certain product/service/practice is legalized. Why? Because for many investments, committed capital is only disbursed after the firm has reached a milestone.
The difference between the business plan done for investors and the plan used for operations is the former is usually quarterly and the later weekly.
It is normal to temporarily focus more on industry KPIs in the short-term than on standardized accounting benchmarks, but it will catch up when the auditors come.
Most SME business owners only want to deal with investors and investment managers themselves without involving their managers. However, I found effective CEOs delegate. For example, the Sales plan is best done when the JIA sits down with the Business Development Director. The benefit of such practice is two folds. One, the Sales Lord knows best. Second, when the Business Development Director is involved, s/he is formally committed to the plan.
Things will never work according to plan, but a plan is still needed nevertheless because without a plan it can get even more chaotic.
Lastly, students who participate in business plan competitions may find this note not very useful for the simulated environment the competition takes place.