Do I Need A Business Plan Or An Action Plan?

If you’re starting a new business or expanding the one you have, a valuable first step is developing a written plan. You’ve heard about business plans, but did you know there is more than one type? Depending on your situation, you may need a complete business plan, a simple business plan, and/or an action plan.

A complete business plan is written for four basic reasons:

1. To help you think through exactly what your business will offer.
2. To assist you in evaluating your idea before you get started, including finding out if there is a viable market for your product or service, whether it can make a profit, how long it will be before you are profitable, and how much money you need to begin.
3. To estimate targets for sales and expenses, so you can measure whether you are on track to profitability as you proceed.
4. To prove and document the viability of your business to others, such as potential lenders, investors, partners, vendors, or landlords.

Most entrepreneurs write a complete business plan primarily to get financing. If you don’t need to convince anyone else that your business is viable, you don’t need a complete plan. You can write a simple plan instead.

Both types of plan allow you to evaluate your business or idea, but the simple plan typically has less detailed financial projections, and doesn’t include any documentation. Most books and software packages designed for business planning will tell you how to develop either a complete plan or a simple plan.

An action plan is quite a different animal. Writing a business plan is just one of the projects you should consider including in an action plan. An action plan is written to help you:

1. Figure out exactly what needs to be done and in what order.
2. Determine when each step is needed and what resources it will require.
3. Prioritize tasks that use limited resources like people, time, and money.
4. Perform a reality check on what can be accomplished with the resources available.

An action plan doesn’t necessarily have a formal structure. It contains whatever elements you need to keep track of what has to be done. It might include any or all of the following:

• Statement of your overall goal
• Descriptions of projects or milestones
• Project calendar
• Inventory of needed resources (e.g. people, hours, or dollars)
• Detailed action plans for each project

You can organize your action plan on paper by creating a planning notebook, or on a computer using calendar or task management software, or a spreadsheet. Begin by stating your goal in specific and measurable terms: “To have a yoga studio in South Beach, of at least 1000 square feet, open to serve customers by April 1st, 2012.”

Next, list the major projects or milestones that must be accomplished to achieve your goal. For a yoga studio, the project list might include finding a location, writing a business plan, hiring instructors, and publicizing the opening. Include a project calendar that shows when each project should begin and end, and a list of resources each project requires.

If you’re using a notebook, set up a section for each project. Keep all the notes and documents related to each project right in your notebook. Begin each section with a list of everything you need to do, then put the tasks in chronological order and assign dates to them.

On a computer, you might use spreadsheet software with a separate worksheet for each project, desktop software like Microsoft Project, or online software like dotProject.

Once your plan is in motion, you can transfer the needed tasks to your daily planner or calendar app each week to make sure they get done. With some software, this can be done automatically.

Don’t put off making an action plan because you’re not sure what all the pieces are. Your plan will change over time as you learn more. Having a plan will get you into action, then you can start finding out what it is you don’t know yet.

C.J. Hayden is the author of Get Clients Now!: A 28-Day Marketing Program for Professionals, Consultants and Coaches.  Susan Myers is a licensed Masterful Facilitator for Get Clients Now!, delivering this road-tested program to businesses and organizations.  To Bring Get Clients Now! to your business contact Susan at Best eMarketing Solutions