How to write a business plan
In the second episode of the Startup Series, CEO and founder of Grind & Co, David Abrahamovitch explains why doing is as important as writing when you’re putting together a business plan.
Your business plan is your roadmap for growth, but it’s only part of your journey to success. David says entrepreneurs must also have the drive to convert their plans into actions.
David started Grind in 2011 after identifying a gap in the London market for a high quality coffee experience. From the first Grind in Shoreditch, located right next door to Starbucks, the business has grown to six-cafe bars and three restaurants across the capital.
In the initial stages, David didn’t have a formal business plan document. “I think the first time we wrote a business plan was when we were trying to borrow some money to finish the build,” he explained. “Someone said: ‘Can you send us your business plan?’ So we thought: ‘We’d better write one!’”
Writing a business plan can help you to focus on your business goals. Think of it as a blueprint - setting out what you want to achieve and the actions you’re going to take to get there. Your business plan can also include targets and milestones so you can monitor your progress and make changes along the way.
David says you should have a basic structure in place before making your first sale. Your initial focus should be on ensuring there’s a market for the idea and that your figures add up. Ultimately, he says the best way to get your business up and running is to simply “get on with it.”
Read on for David’s advice on how to create an action-based business plan:
1. Don’t sweat the small stuff when you’re starting up
Work out what’s important and don’t get stuck under a deluge of detail. Your business plan should contain just enough information for you to make a start. Execution is just as important as your idea.
David said: “Business plans absolutely have their place but, at the same time, I see people who are spending months writing a business plan. They’re worried that someone’s going to copy their idea, they’re worried about trademarks.”
“All these things are important but, actually at the moment, you don’t have a business. You don’t have a brand to protect. You’re worried about the wrong things. You’ve got to get, as quickly as possible, to the minimum viable form of that business and that idea.”
2. Test the market before taking your idea further
There are plenty of ways to test your business idea and whether there’s a market for your product or service. David explained: “You can do pop up stores, you can sell online. The barriers to entry for testing an idea are probably lower than they’ve ever been. Yes, look at the numbers, ensure you think there is a real market for what you’re doing, but ultimately just get on with it.”
3. Cost your time as well as your money
Once you’ve tested your business, you’ll be well placed to determine whether or not you should take it further. David adds that it’s important to focus on potential loss of time, as well as loss of money. If you discover that your business is unlikely to deliver a good return, move on as quickly as possible: “If it’s not going to work, you want to get to that point as quickly as possible,” he said. “Then, you can move on with your life having hopefully lost as little as possible, rather than spend two years planning to then find out it doesn’t work.”
4. Once you’ve planted the seed, help it grow
You can add more detail into your business plan once you’ve been through the testing stage and your customer base is starting to grow. At this stage, you’ll have a clearer picture of the direction your business is likely to take.
“Where a business plan is important is once you’ve got that seed of a business,” he said. “You’ve tested it a little bit, you’ve had some customers and actually had some revenue.”
David says owners should review their activities to plan for the growth stage. He recommends that business owners ask themselves the following questions:
Which parts of my business are working?
What is not working?
What are my high margin products and services?
What are my low margin products and services?
Which business activities require a huge amount of energy to achieve?
And what’s a lot easier to achieve?
5. Once you’re up and running, put more detailed plans in place
The answers to these questions will help you add more detail when you’re planning for the growth stage. Grind evolved from one property to six-cafe bars and three restaurants. “There was no master plan for world domination at the beginning,” said David. “It was very much an evolution, feeling out as you go.”
David said now’s the time to take stock and focus on the strengths and weaknesses of your business. “When you really start to look at the nuances inside what you’re doing, try to distill that down into its simplest possible form and put that into a business plan. [It’s] about how you’re going to scale it, how you’re going to replicate it.”
He added: “This is where I think it [a business plan] really adds value. Not so much at the concept stage. But more like, ‘I’ve got this, now how am I going to grow it?’”
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