Business planning as most know it is out-of-date. The practice of prescribing every detail of your plan for success is “old-school.” You must get new products to market fast and be quick to change based on customer feedback.
But you can’t stand in front of the sharks – be they customer, investors or employees — with a plan that says “Let’s just throw our product over the wall to customers and see how they respond.” You need some kind of starting notion about your market, customer needs, targets, competitors, source of competitive advantage, and pricing.
A “new-school” business plan is dynamic, customer led and iterative. It should be looked at as a flexible hypothesis – one that can be generated in some detail very quickly, and can describe ideas that will get your customers, potential investors, sales folks and marketing partners on board with your initial approach. Then, market feedback can be used to adjust accordingly.
Here’s 5 essential questions a new-school business plan will answer.
1. Every Customer Wants to Know: What’s Unique About Your Offer?
Huge percentages of businesses fail, many of them for one inexcusable reason: customers see no advantage in buying the company’s product. A new-school business plan leverages new types of efficient and low-cost market research to determine if your product can uniquely meet the needs of an initial target market.
A new-school plan also lays out secondary and tertiary markets that can be “pivoted” towards based on market feedback. Old-school plans relied on time-consuming and sometimes expensive studies to define the end-all be-all target with no suggestion of alternatives – success with the initial target is assumed.
2. Every Potential Investor Wants to Know: Is Your Advantage Sustainable?
Old-school plans often assume a known set of competitors that are identifiable and somewhat predictable. This kind of assumption makes investors, who are talented risk managers, very nervous. New-school plans anticipate disruptions to the market simply because they will happen.
Business plans that get funded make rigorous attempts to predict how different trends and developments will disrupt the nature of the competition in an industry.
Can you get this kind of prediction right 100% of the time? Definitely not. Do investors feel better about investing in businesses that attempt to look around corners and take advantage of potential shifts? You better believe it!
3. Every Salesperson Wants to Know: Can I Communicate This Advantage?
Entrepreneurs eventually face an undeniable truth on the road to big success: their business can scale only if they have customer-facing employees who can articulate the company’s unique value proposition. Old-school plans often developed “me-to” positioning plans that worked when markets and competition were more “reasonable.”
The explosion of technology and new competitors in all industries have left no more “reasonable” markets. New-school business plans must leverage the latest findings about how customer’s brains process commercial information. This will allow them to position products simply-yet-powerfully, in ways that customers respond to — and in a manner that employees can execute.
4. Every Owner Wants to Know: Can I Charge Enough to Make This Business Work?
Old-school business plans developed pricing strategies based on product costs, or based on competitor’s pricing. But new types of business and pricing models have made the art of setting prices very tricky.
Much like new-school positioning plans, new-school pricing plans get into the brains of customers to understand all of their options for your type of product and determine what they perceive as “fair value.” Price points, new business models and new pricing approaches can then be tested, ensuring that you can charge enough to generate healthy, growth-producing margins.
5. Every Plan Writer Wants to Know: How Fast Can I Get This Plan Written?
Like almost everything in the technological age, success can be studied, duplicated and made accessible to more people. Business planning is no different.
A good set of frameworks that duplicate the thought processes that were used in the greatest marketing successes can be useful. Such tools can make generating a new-school business plan something that can be accomplished in a few days rather than months.
We know this based on our experience. Our company has been conducting two-day business planning sessions for Fortune 500 companies for many years. In a short period of time, companies can and do develop the essential hypotheses for how they could create, communicate and capture value in their markets. This gets them past “go” in communicating their initial business plan to customers, employees and investors — and quickly to the work of testing, refining and pivoting these ideas.
Through her popular Bestseller in a Weekend™ program, Alicia Dunams has educated thousands of Business Owners, Entrepreneurs and Professionals over the past 9 years on how to write a book fast. Now she has teamed up with marketing experts and Impact Planning Group Partners Tom Spitale and Mary Abbazia to create the Business Plan in a Weekend™ program.