Create a Business Plan for Fewer Hassles and Faster Growth

Office Space movie

Writing a business plan can help make sure Office Space doesn’t feel relatable [source].

There’s a famous scene in the cult-classic 1999 movie Office Space where the main character, Peter, is confronted by his boss, Bill. Amidst the dull hum of white-collar cubicle bliss, Bill passive-aggressively asks Peter if he got the memo about putting cover sheets on all “TPS Reports” (if you’ve seen it, you’re probably already chuckling).

Apparently, Peter neglected to include a cover sheet on his most recent TPS report, and Bill wants to make sure he got the memo so he can rectify this moving forward. Note that he’s not even directly asking Peter to make sure he includes a cover in the future. He wants to know if he got the memo. Bill leaves, saying he’ll make sure he sends another copy of the memo to Peter.

The anti-drama is painfully relatable to anyone who has ever held a desk job in a large, corporate bureaucracy. The takeaway from the scene is clear. The cover sheets, the TPS reports—they’re not important. Neither are even difficult to complete. And yet, these minor interruptions and annoyances from his boss form the cadence of Peter’s day. His week. His life. His miserable, soul-sucking life.

All these things are a hassle. These hassles pile up so high that they make him dread going to work every day. They make him feel like a useless cog in a wheel (in truth, he is). And the fact that they are so small and minor individually is what makes them even more infuriating. What literally haunts his dreams are not big things like salary or responsibilities or key projects. No, his nightmares are filled with these daily hassles—with Bill “just checking in” about that latest memo.

If you’re coming up with a business plan for a new venture, there’s a good chance you can relate to this scene. Perhaps it represents what drove you to become an entrepreneur in the first place. Now that you’ve managed to escape Peter’s situation, make sure you don’t replace it with an entirely new set of hassles that you can’t do anything about.

Business planning reduces hassles and friction

There are many reasons to write a business plan, but one of the primary goals is to reduce friction as you build your venture. Friction is anything you rub up against you that creates tension and slows you down. By creating a “low-friction plan,” you can avoid or at least mitigate problems down the road—plus, it’s what potential lenders or investors expect when you approach them for funding.

A good business plan can reduce the hassle in many ways.

Align on a mission statement that ensures all partners understand what you want to accomplish and what is outside of that core. Embrace your financial plan—financial assessments give you a clearer vision of cash flow and what resources might be needed.

Accounting for risk is one of the best ways to reduce friction in the long term. Doing a SWOT analysis is a great way to assess your internal (weaknesses) and external (threats) risks, in addition to strengths and opportunities. When you do an honest, thorough analysis, seeking diverse input, it can illuminate a wide array of risks, giving you the opportunity to explore and mitigate them as you work through your plan.

The layout of a SWOT analysis

When humans are involved, hassles follow

As the scene from “Office Space” demonstrates, though, it’s not always traditional business risks that plague a venture. It’s the daily hassles that can stifle progress and suck away your drive to succeed. Hassles are the inevitable human cost of any venture. Hassle encompasses all the stress and unpleasantness that can come along with a project. Like risks, they’re not necessarily bad—just something to be managed.

Risk is about outcomes. Hassle is the human element. Both can overwhelm you if there isn’t a plan.

Managing hassle may take the form of putting your reputation on the line to get someone to partner with you. It may creep up in the form of a family member who is hurt that you didn’t ask them to help you with a certain project. It could be a small investor who calls you ten times more than your primary funder. Or worse, it might be a business partner who is directly complaining to one of your investors without your knowledge.

In the research for our upcoming book “Fruition: How Great Ideas Come to Life,” we found that the hassle (human) side of your low-friction plan is just as important as the risk (outcome) focus.

The conventional wisdom is to put these hassles in the bucket of small stuff you shouldn’t sweat. But many hassles don’t stay small for long. Hassles can fester day-in-day-out and become a major liability.

That primary investor may tolerate financial risks if the venture is interesting, fun, and potentially rewarding. But if it becomes a hassle? If it creates everyday annoyances? You’ll hear about it. You need to “budget” for these human costs just as you would financial costs, and show others that you’re on top of it.

That’s because hassles can swim around your head as you try to fall asleep at night and fill your mornings with anxiety and dread. Dread is an insidious emotion. It’s not pain—but rather, the anticipation of pain. Research has shown that the dread of pain fires up the same regions of the brain as the pain itself. Yikes.

Techniques to overcome hassles and friction

The most important remedy we’ve effectively already taken care of: being aware of the problems that hassles can create, and being on the lookout as you progress. Consider this your “The More You Know” moment.

Ideally, though, you should anticipate potential hassles like any of the other risks—and take proactive steps to mitigate and plan for them. Like everything else in your business plan, the whole point is to reduce friction. Here are some techniques to guide you.

1. Create your “who inventory”

The “who inventory” lists and briefly describes all the potential players involved with your venture as you progress from the current world to the better, future world that you envision. Take time to catalog everyone with whom you may intersect. Where possible, be specific with names.

Some will be obvious: investors, consumers, business partners, employees.

But let your mind wander through your vision for your business, and you will inevitably come up with many, many more:

  • New suppliers if you expand in year two
  • Government bureaucracies for obtaining permits
  • Compliance professionals with lending institutions
  • Family members (those can be the trickiest of all!)

When you reach a critical mass, earmark and detail potential hassles with anyone on the list. This is a place to be brutally honest (and perhaps keep your conclusions private). Consider personalities and personal histories. Where you have questions or unknowns, reach out to others for their opinions and experiences—a business mentor can be helpful here.

It may be helpful to categorize your list and/or diagram it out over the steps it will take to build and sustain your venture. What’s important is that you spend the time thinking through this and documenting it. Include others to get their input and suggestions. Update it as you go. The final inventory may be somewhat messy, but a mess you can see is better than a mess you are blind to.

2. Go beyond user or buyer personas

Personas are a deep dive into the profile of various players involved in your venturetheir actions, motivations, needs, thoughts, daily life, and more. The goal is to develop a deep knowledge of what makes them tick and what to expect when interacting with them.

Each persona will allow you to play out what to expect and identify potential hassles. After completing the who inventory, choose only the most important to expand on.

Buyer or user personas—fictional representations of your ideal customers based on their demographics and other characteristics—have been used successfully for many years in industries like software development, and you can find many resources and templates online. Typically, they are a more generic profile—such as “angel investor” or “premium consumer”—but you may also find it necessary to hone in on specific individuals.

The primary personas are traditionally created for end users/consumers of your business—your target market. It’s just as important to understand who you are targeting as it is to know who you are not targeting or working with. Many ventures fail because they try to have an appeal that is too broad. They end up lacking focus and never find their place in the market.

As the name suggests, the personas should feel personal. Give each a name and a stock photo. Make them part of your team. Ask questions like, “Would Sandra complain about having to wait 10 minutes for confirmation, given her tight schedule?” Or, “Will Luis call at the first sign of bad news?”

Use these personas to conceptualize the potential hassles you might encounter. Create scenarios and let them play out in your head. Then, plan accordingly.

3. Do a SWOT analysis

A SWOT analysis is a typical part of preparing any business plan, and you may even include it in the main body.

As discussed above, the tendency is to focus only on more “functional” risks like finances or competition. But, don’t forget to consider the human element—the hassles. Use this awareness and the other techniques to bring this part to life and create a more comprehensive analysis.
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Tie it all together

How you take what you’ve learned about your potential hassles and formally integrate it into your business plan will depend on your specific situation. As with any risks you’ve outlined, you likely won’t have a section titled “Hassles”; the learnings should permeate various parts of the plan. Outputs from some of the techniques above may make sense to include in an appendix, and you will at least want to document everything for your own use.

As always, know your audience and focus on what will be most beneficial for them. Investors will want to know that you’ve anticipated what might become a hassle for them (and you) and that you have a plan. You can give your credibility a major boost by showing you’re on top of this part of building your business.

With some foresight and a little healthy paranoia, you can be much better prepared for the journey toward a successful future. Ideally, it’s a future that keeps to a minimum the hassles, friction, and memos about TPS cover sheets.

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John Lavelle

John believes that everyone—from multinational manufacturers to PTA parents—can unleash their ideas and build a better world. He has worked with top consumer packaged goods companies to revolutionize how they innovate and bring their ideas to market. He also has extensive experience leading innovation consulting teams, selling and executing custom research, and econometric forecasting. Along with Chris Adrien, he is co-author of the forthcoming book, “Fruition: How Great Ideas Come to Life.”

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5 People You Should Talk With Before Starting a Business

starting a business

You’re probably mulling over a business idea. It’s probably something you’ve been thinking about for a while. And you’re probably ready to turn your business idea into a reality.

As part of the planning stage, you’ll want to gather information, do research, and make sure that your business idea is viable. During this information-gathering stage, there’s a small list of people you should talk with before you move forward with bigger steps like applying for a bank loan or looking at commercial space.

To help you on your business quest, carve out time to talk with the following five people.

1. Your spouse

One of the first people you should talk with about this new venture is your spouse. It sounds like a no-brainer, right? But some people get so caught up in their business idea that they don’t have a real sit-down conversation about how the business could impact their relationship, finances, and free time.

“Starting a new business can be all-consuming, and the support of your spouse and family will make all the difference,” business mentor and lawyer Anne Sumpter Arney says. “It is best to know whether or not your family is ready for the commitment and time that starting a successful business will take.”

Tim Berry, founder of Palo Alto Software (makers of Bplans), has been open about his experience of bootstrapping his business and its impact on his relationship with his spouse.

As we grew to revenues greater than $5 million in the early days, we had no outside investment, but my wife and I had three mortgages along the way and $65,000 in credit card debt at one point […] in my case, my wife was with me in all the key moments and shared the risk. If I hadn’t had her on board, I wouldn’t have done it.”

2. A lawyer

Starting a business involves a few legal hoops, so you’ll want to talk with a lawyer. For instance, should you start an LLC, an S-Corp, or an Inc.? A lawyer can give you advice and draw up the legal paperwork to make sure your business structure meets your goals and limits liability, Arney says.

A lawyer can also help you define business relationships. Maybe you borrowed money from one of your peers in exchange for equity in the business, or maybe you plan to start a company with several partners—whatever the situation, you’ll want legal documents to set boundaries and minimize future disputes, Arney says. Check out this article for advice on finding the right lawyer for your business.
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3. An accountant and trusted advisor

When you’re just starting out, you’ll need some accounting advice. A lot of new business owners assume an accountant is just someone you call to handle taxes.

But as your business grows, they can also be a trusted advisor—someone to help you make sense of your financial statements, cash flow, and to strategically think through opportunities and challenges. As you start bringing in more customers and doing more business, you’ll probably find yourself wondering whether it’s the right time to buy a new piece of machinery, finance expansion, or hire your first employee. An expert advisor can help you make better business decisions with confidence.

4.  A business coach or mentor

Getting a little advice from someone in the business world is also a good idea. Whether you’re opening your first business or your fifth, talking with someone who can give you independent business advice will go a long way, Arney says.

“You need someone who has been where you are and knows what there is to lose, as well as to win. Business owners need someone who knows them and their business and is independent enough to keep the vision tied to the real world,” she says.

Ideally, this person will be able to give you advice for years to come—not just as you plan your business, but also as your business grows. If you don’t already have a business coach or mentor, check out SCORE. They offer free business mentorship opportunities all around the US.

5. A banker

Entrepreneurs sometimes obtain at least part of their financing through a traditional bank loan. If you plan to borrow money, you’ll want to find a trusted banker to help you through the application process. You may want to ask your business adviser to recommend a banker, or you could ask other business colleagues for a suggestion.

You’ll need to start a business checking account anyway, so start learning about what different banks and credit unions have to offer your business. Having a real relationship with a bank can be helpful if you ever want to apply for that loan or line of credit.

The smart way to start a business is with as much information as possible. By talking with these five people, Arney says you’ll start your business on solid footing.

Editor’s note: This article originally published in 2014. It was updated in 2019.

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Lisa Furgison

Lisa Furgison is a journalist with a decade of experience in all facets of media.

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Why SWOT Analysis Belongs in Your Business Plan

SWOT analysis

Why add a SWOT analysis into your business plan and the strategic planning process?

I believe in it because the SWOT phase was vital to my planning process as I grew Palo Alto Software from zero to over $5 million in annual sales.

If you’re not familiar with the SWOT matrix, it stands for strengths, weaknesses, opportunities, and threats. Read more about what it is and how to do your analysis, and download our free SWOT analysis template to help you get started.

SWOT analysis example

Here’s an example of what a SWOT analysis can look like.

Real-world examples of SWOT analysis in action

Let me tell you some true stories about SWOT analysis in action, in a real business setting.

The key here is that you should try to avoid performing your SWOT analysis alone in your office. It’s a great tool for bringing your team and your stakeholders in on the conversation.

If you’re holding regular business plan review meetings, SWOT analysis is a good framework for thinking through how you need to adjust your business strategy to meet your goals.

Brainstorm together

I used SWOT sessions every few months to gather my team leaders and engage in brainstorming discussion about our business situation.

We divided the discussion into four parts, opened it up, set the tone as brainstorming—no bad ideas, and no taboos—and had good discussions about all four elements: strengths, weaknesses, opportunities, and threats, as they related to our financials and key metrics, the business climate in our industryand the work we were doing together to grow our business.

Save time

Our SWOT sessions took only an hour or two. We used a whiteboard and worked on bullet points. Just like the Lean Planning approach to business planning, less is more. You don’t need to generate a 40-page report.

The goal of a SWOT analysis is to develop actionable insights—you want to catch opportunities and pitfalls sooner. It’s one way to minimize risk when you’re starting and growing your business.

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Engage your whole team on your strategy and goals

Thinking in SWOT terms put everybody on the team into engagement with the whole business, the broad view of strategy, market, and goals. It seemed automatic to me—the topics themselves, in standard brainstorming mode, invited us all in.

Your business plan should be a roadmap that guides the strategic course of your business. Use SWOT analysis to help people understand how their work translates to the goals and milestones you’re laying out in your business plan.

Gain real, actionable business insights

The SWOT analysis provided a lot of insight.

It was in one of these sessions that somebody suggested that I should change my focus a bit and deal more with the large picture than the specific code. It was also in a SWOT session that we realized we needed to make our product downloadable on the web (back in 1998, when we were among the first). In another session, we realized, as a group, that our key differentiator was the know-how and how-to built into our software. 

If you haven’t done this type of analysis before, check out our SWOT analysis examples article for some tips on how to use it to develop actionable strategies.

SWOT gets people committed, not just involved

In breakfast, the chicken is involved, the pig is committed.

In the business planning process, commitment is essential. Plans need to be implemented, and implementation means commitment. There has to be accountability and peer pressure. You have to follow up on what was planned to make sure that it was actually carried out.

Here are some ways to develop commitment within your team:

You can use the SWOT analysis to bring team members into the strategic discussion—not just the most senior level leaders. Your managers have to be part of the team that discusses the strategy early on, as the first stage of every strategy review and revision.

As you do your SWOT, even if it’s just you, and better yet if it’s with a team, there is an automatic process of moving away from the details and looking at the business in larger, more strategic terms.

I can’t cite research on that, but I can say that I’ve seen that happen dozens of times in my career, first hand, first as a consultant and then later as founder growing my business with a team. People like strategy. They like to be included. And SWOT puts strategy front and center, without requiring lots of buzzwords or windows dressing.

It’s a good strategy summary

The SWOT analysis in your business plan makes a perfect first step of the regular plan review every good business should be doing once a month.

Either by yourself, if it’s just you, or with your team, take a good look at the SWOT. Ask what’s changed in your business.

Normally strengths and weaknesses are long-term, inherent qualities of a business, which can change, but only slowly. Opportunities and threats, on the other hand, are normally external to the business, out in the market and the world. They can change fast. Opportunities come and go, and threats can appear very quickly.

SWOT belongs in your business plan

The bottom line here is that the planning process, for both startups and for growing companies, is about the people more than the plan. Your business plan is there to guide execution. It needs a strategic component like a SWOT analysis, and it should be reviewed and revised regularly.

Whether you’re doing business planning as a way to strategically guide your company, or you’re writing a business plan because you’re seeking funding, conducting a SWOT analysis will help. Funders will want to know you’ve thought through every aspect of your plan. But even if you’re not seeking funding, the strategic planning process—business planning—is proven to help your business grow faster, and a SWOT analysis can help.

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6 Mistakes to Avoid When Writing Your Restaurant Business Plan

restaurant business plan mistakes

If you’re serious about opening a restaurant, you’ll have to draft up a formal and accurate business plan to pitch to banks, investors, and even potential employees.

I won’t lie—writing a formal business plan isn’t exactly a breeze. It takes a lot of time, effort, dedication, knowledge, and passion to get it right. But if starting a restaurant is your goal, a business plan is one of the first steps toward reaching it.

There’s scientific evidence that businesses that plan even grow faster. But, you probably only need a formal business plan if you’re seeking investment funding from an angel investor or a loan from a bank. If you don’t need either of those, putting together a strategic Lean Plan that you can update often and that takes less time to write and maintain is probably a better use of your time.

The reality is that 26 percent of restaurants fail within one year, and 60 percent fail within three. If you want to beat the odds, you need to be prepared for running your restaurant long before the doors open. You can set a clear vision for your restaurant’s path to success with a business plan.

Unfortunately, you can easily make a lot of mistakes when writing up your first business plan. To help you avoid those errors, take a look at some of the most common, and how you can avoid making them yourself.

Mistake #1: Putting in minimal effort

A restaurant business plan is not the midterm essay you wrote in college for that class you didn’t care about. This document actually matters. As such, you can’t push it off until the last minute, half-ass it, and expect good results.

Serious investors will recognize a poorly-constructed business plan when they see one. They’ve earned their money because they know which kinds of businesses (and business leaders) turn a profit and which ones do not. If they look at your business plan (or listen to your investor pitch) and can tell you didn’t put much effort into it, they’ll laugh you right out the door—as they should.

Your restaurant business plan is the key to opening your doors. If you know you want to run a restaurant, prove it. Do the work.

Find your information. Research your competition. Crunch your numbers and put together a realistic sales forecast for your restaurant. Do everything it takes to flesh out a fully-detailed business plan.

Show your effort and it will pay off. Breeze through it and your restaurant may never have its opening day.

Mistake #2: Being too dull and dry

The people reading your business plan don’t have all day. It’s best to get right to the point and make it an interesting read. Remember—more words don’t always make it better!

Throw in some visuals to make your business plan clear and exciting. Some ideas are:

  • Headshots of your restaurant’s leadership team
  • Your restaurant’s logo
  • Photos of your concept or design
  • Drafts of your menu
  • Maps to show your location compared to competitors
  • Any existing or planned marketing collateral
  • Charts and graphs to explain your numbers in a visual way

If you hand in another dry business plan, potential investors will do everything they can to finish reading it before their next meeting or lunch break. That means they’ll probably skip over important details, especially if they’re hidden in overly-complex writing.

It’s crucial to deliver all the details to investors upfront and in an intriguing way. Remember, it’s a human being reading that business plan. Be clear, concise, and get to the point, and they’ll be thankful.

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Mistake #3: Not making your competitive advantage clear

What makes your restaurant special in the company of one million other restaurant locations nationwide?

More importantly, what makes you stand out from the other restaurants in your state, town, or street? Answer: your competitive advantage. If you don’t have one of these, there is absolutely no reason for diners to go to your restaurant over a competitor’s.

On top of building and explaining your competitive advantage, your restaurant’s business plan should have an entire section completely devoted to competitive analysis. This analysis should include how you plan to differentiate yourself from other restaurants, whether it be through menu items, concept, price, location, atmosphere, or management tactics.

Whatever your competitive advantage may be, make sure it is justified, fleshed out, and very difficult to argue against. This will take some time to get right, but your competitive advantage is what will sustain your restaurant longer than others.

Mistake #4: Glossing over the executive summary

Your executive summary acts as the foundation for your entire business plan, and your business plan is the foundation of your restaurant.

So, why would you not take the time to craft an amazing executive summary? Use this opportunity to reel your readers in, show them you are passionate and knowledgeable about the industry, and that you mean business.

Your executive summary should contain your mission, the key facts of your business, your competitive advantage, and the main takeaways readers can expect to see fleshed out when they read your entire business plan.

If you fail to hook someone with an executive summary, or if yours is simply there as a formality, you’ve wasted a huge opportunity to interest investors.

In the immortal words of Eminem: “You only get one shot.” Well said, Slim. Well said.

Mistake #5: Underestimating the value of marketing

In the marketing section of your restaurant business plan, don’t just mention a budget and that you “plan on using social media.”

Marketing is how you make your competitive advantage clear to potential and existing customers.

Consider answering all of the following questions in your marketing section:

  • Will you be offering a customer loyalty program?
  • How do you plan on getting involved with a charity or sponsoring community events?
  • Will you be working with a PR company or a local news outlet?
  • Do you intend to advertise through Google AdWords, social media, or some other paid digital marketing platform? What about print ads?
  • Do you have/plan to have a restaurant website?
  • Will you keep a customer database through your restaurant POS to micro-target your customers and keep track of guest behavior and buyer patterns?
  • Will you use a WiFi marketing tool to boost customer loyalty?

Remember, restaurant marketing is not just about bringing customers in—it’s about bringing them back. Have a plan to leverage your competitive advantage with your target market with modern, creative marketing tools and strategies, and investors will be impressed.

Mistake #6: Guesstimating sales and costs

Nothing drives investors crazier than seeing numbers that don’t make sense. If you simply write that you will do $1 million in sales for your first year, readers will want to know why.

Investors will want to know your financial forecast, your profit margins, your labor expenses, your fixed and variable costs, and so on. Without a clear layout of expected cash flow, investors won’t be thrilled to throw cash your way.

Take as much time as needed to project your sales and expenses as accurately as you can. These numbers can be based on industry standards, historical documents, or numbers from another restaurant you operate. It’s not necessary to be a financial expert—but it wouldn’t be the worst idea to consult one if it means procuring funds for your business.

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Crafting the perfect restaurant business plan

While these mistakes can be simple slip-ups in your first business plan, it’s important to avoid them to the best of your ability. This document can put you in business, but when it isn’t given the attention, dedication, or resources it deserves, it might postpone your grand opening indefinitely. Put ample time, effort, and resources into developing your restaurant business plan and you will soon reap the rewards.

Remember, this business plan is not just for banks and investors; it’s also for you. Writing a business plan is a great way to make the vision for your new restaurant clear and define your path to success. There will always be bumps along the way, but writing a solid, well-researched restaurant business plan will help you make sure you’re moving in the right direction.

If you’re looking for examples of business plans for restaurants, Bplans offers a library of free samples you can download. And to make it easier to get started writing your plan, download our free business plan template.

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AJ Beltis
AJ Beltis

AJ Beltis is a blogger and content marketer for Toast POS, a Boston-based restaurant technology company offering an all-in-one point of sale solution for restaurants nationwide. AJ is a certified inbound marketer committed to connecting restaurants with the resources they need to form successful relationships with their customers. You can follow AJ on Twitter @AJBeltis.



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5 Things Planners Should Keep in Mind to Create Change in 2019

Eliza Esquivel, a marketing consultant, shares her insights on the future of account planning with Jessica Abo.


5 min read

Opinions expressed by Entrepreneur contributors are their own.


In this video, consultant Eliza Esquivel shared her insight on future of account planning with me. Here are two important questions for Esquivel about business planning in 2019.

What opportunities do you see for the planning discipline in 2019?

Esquivel: The account planning practice has remained largely hidden from anyone outside of advertising, so I see a huge opportunity in 2019  to explain what we do and apply it more broadly.  If the planning mindset were applied to the bigger forces shaping our society today like technology, entertainment, media and even organizational design we could have wide-reaching impact in creating a world we all want to live in.  

This is the year planners can unlock new growth and revenue streams in ways that have wide benefit for people and society.

Professionals trained in account planning can rally together to find new ways to bridge the way creativity has been generated in advertising with the way creativity is generated beyond advertising and marketing.  

Account planning is a disciplined process of connecting the dots from radically diverse perspectives:

  • We generate insight and foresight,
  • We conduct audience analysis through a incisive cultural lens,
  • We distill information for maximum stimulation of the imagination, and 
  • We lead fearless ideation that gets results.

What are the five things planners should keep in mind to create change?

First we need to distinguish strategy from planning.

Sir Lawrence Freedman, Professor of War Studies at King’s College defines strategy as a focus on power and the use of resources.  Exploring power dynamics and the flow of resources, especially financial resources, is an important part of business success.  And is a critical element of what we do.  But strategy is not planning.  Planning is the application of multiple ways of knowing and seeing to essentialize a problem so that can be acted on by the imagination.  Put another way, planning is about powerful art.  In order to be successful in building a bridge outside of advertising, we need to be adept at both strategy and planning.  But planning is the bit the larger world has yet to understand and utilize to its greatest potential.  

Second, we need to embrace “new power.”

Old power is about hierarchy, exclusion and resource consolidation.  New power is about networked governance, transparency, inclusion, and shared resources.  Often times, new power is informal.  Look at culture, at categories, and industries for signs of new power – where are informal networks collaborating to create new approaches and or breaking through the status quo?  This is where the opportunity for planners lies because these groups of people will likely be the most open to new approaches and fresh ways of solving problems.   

Third, we need to keep art in focus.

It might sound counter-intuitive for me to recommend that you focus on art after I’ve just talked about power dynamics, but being able to understand radically different perspectives is one of the things that makes planner’s valuable.  Art is not just about going to museum’s or watching art films – although these are great ways to start.  But art is about all the arts which include architecture, literature, film, music and so on.  The most valuable approach is not to simply look at art, but to study it like an artist.  How do ideas float across artistic disciplines? How do other artists and critics talk about and think about the ideas in their art?  For example, one of my favorite things to do is read everything about a film I loved – from the directors, writers, producers and to also try and study the development process and funding of the film.  

Fourth, we need architect creativity as part of the way we architect growth.

Architecting growth is about going beyond consumer understanding and imaginative leaps to provide platforms for business growth based on understanding sources of revenue and profit. It’s needed.  But it’s not enough.  We also need to become “architects of creativity.”  This is about understanding the structural and contextual requirements for creative breakthrough and then designing those elements into the places they are needed most.  Linda Hill’s staging matrix for innovation is a great example of this: make room for creative abrasion (being able to have real debate about ideas), creative agility (psychological safety for experimentation) and creative resolution (decisions that embrace risk).  We need to create “cultural experiences” within an organization where creativity itself can be practiced.

Lastly, we need to defend the science of the imagination.

According to the World Economic Forum, creativity will be the third most important skill required in 2040 (behind complex problem solving and critical thinking). Increasingly creativity is desired more in business, but it’s not fully understood or embraced. Business decision-making has real financial consequences so factual proofs are often preferred over alignment to unknown unverifiable “gut.” However, there is a science of creativity and the imagination. It was Einstein himself who reportedly said, “The true sign of intelligence is not knowledge but imagination.” So we need to become more familiar with the science of imagination – and to package and process ways to access intuitive thinking as well as analytical thinking.  

The ultimate opportunity for planners is to redefine our discipline and process to appeal to worlds beyond marketing, especially in industries that could benefit from a more rigorous and holistic approach to “creation” for the greater good.

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How to Write a Business Plan: Use This Checklist to Keep Yourself on Task

business plan checklist

First, why are you writing a business plan? Usually, the reasons fall into one of the following areas:

  • For idea validation: You have a business idea and just need to get all the details on paper so you can start to really understand whether you have a good business model.  
  • For a bank: Do you need a formal business plan to give to your bank as part of your small business loan application?
  • For investors: Are you seeking funding for your startup from angel investors or venture capitalists?
  • For strategic reasons: Does your company need an internal roadmap for growing and managing your business?

How you format your plan and how detailed it will depend on why you’re writing it and who will look at it when you’re done. If you’re looking to validate an idea, start with a very simple one-page pitch. If you’re seeking funding, you’re probably going to need a traditional, formal business plan. If you want to use your business plan as a tool for strategic management and growth, write a Lean Plan so you can update it easily and often.

Here, you’ll find a checklist for writing each of these types of plans, so you can choose the one that fits your particular needs.

If you have any questions, be sure to reach out to us on Twitter @Bplans and we’ll be happy to point you in the right direction.

1. The simplest business plan: A One-Page Pitch

A One-Page Pitch is the simplest business plan you can write.

There’s not much difference between it and the executive summary in the standard business plan—though of course, as the name implies, it should fit onto just one page.

You can use this version of the business plan to validate your idea (more on that here), or to provide investors with a clear and succinct introduction to your business.

You can also use it to get all of your ideas onto paper and distill your thoughts into the essential business plan elements before you begin writing a standard plan. You can create a One-Page Pitch in LivePlanuse this free templateor follow along with the checklist below.

One-Page Pitch checklist:

  • Describe your business in one sentence (what do you do, and who do you do it for?)
  • Describe the problem your potential customers have
  • Describe your solution to the problem—this is your product or service (how does it solve your customer’s problem?)
  • Explain who your target market is and how large it is
  • Describe your competitive advantage (talk about how your customers are solving their problem currently as well)
  • Describe how you will sell to your customers (will it be directly, or via a storefront, distributors, or a website?)
  • Describe what marketing activities you will use to attract customers
  • Detail your business model—this is how you will make money (what are your revenue streams?)
  • List your major initial expenses—startup costs (don’t go into a lot of detail here—it’s early days at this point)
  • List your primary goals and milestones that you want to accomplish over the next few months
  • Outline your management team and any people you want to hire to help you launch your business
  • List any partners and resources you need to help you launch

The Lean Business Plan Template

2. A Lean Plan: A nimble tool for growing your business

Lean Planning is a methodology that will help you grow a better, smarter business a lot faster.

While you can use Lean Planning to help you produce a business plan document, you should think of Lean Planning as a tool, rather than a path to a finished product. If you’ve heard of a business model canvas, a Lean Plan is really a better, more useful version of that idea.

The goal here is to write a business plan that has more detail than a one-page pitch, but that’s still quite brief. It should be a truly useful tool that you review and update regularly. It’s a great framework for reviewing your financial goals and progress on a regular basis. For more resources on Lean Planning, check out this guide.

Lean Business Plan checklist

  • Write a One-Page Pitch (as outlined above—this is how every Lean Plan begins)
  • Test your idea (get out and talk to your potential customers—make sure you’re on the same page as they are)
    • Do they have the problem you think they have?
    • What do they think of your solution?
    • What’s the best way to sell to them?
    • What marketing tactics will work? What won’t work?
  • Review your results (you will likely do this throughout the life of your business)
  • Review your financial performance if you’re already up and running
  • Revise your plan based on what you’ve learned and set new milestones
  • Set your sales forecast and create a budget for your expenses
  • Once you’re up and running, be sure to hold regular plan review meetings to ensure you stay on track

3. The standard business plan

For most people who are pitching a bank or an investor, a standard business plan will be the required format for the business plan. This is the version of the plan these investors are most familiar with, and the version that will give them the most information. It contains all the needed business plan components that banks and investors expect.

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If you want to increase your chances of getting funded, follow this format. Check out our definitive guide on how to write a business plan. You can also download a free business plan template here, or use LivePlan to walk you through writing an investor-ready business plan.

  • Define the opportunity
    • Go into more detail here about the problem and why it is worth solving
    • Discuss your solution to the problem (your product or service)
    • Talk a little more about how you validated your idea and what your future plans look like
  • Write the market analysis summary
    • Include more detailed information about your market segmentation and your target market segment strategy, key customers, future markets, and the competition
  • Outline how you’ll execute the plan
    • Discuss your marketing plan and your sales plan
    • Include information about your location, facilities, technology, equipment, tools, key metrics, and important milestones
  • Write the company and management summary
    • Write about the organizational structure of your company, the management team, any gaps in the team, and your personnel plan
    • Include information on your company’s history, as well as information about ownership
  • Write the financial plan
    • Arguably one of the most important business plan components, this will include:
  • Write the appendix
    • This is the spot for anything that’s important, but that would otherwise bog down someone reading your business plan for the first time; include extra detail, charts and graphs here
  • Write an executive summary (this goes at the beginning of the plan document, but we recommend you write it last)
    • Talk about the problem you are solving, what your solution is (your product or service usually), the market, the competition, and some key financial highlights

Whatever your reasons are for writing a business plan, you should know that it’s scientifically proven that planning makes you more successful. If you’re looking for more information on how to write a business plan, check out our business plan writing guide.

If you have any questions about writing your business plan, or about what format to use, be sure to reach out to us on Twitter @Bplans.

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How to Get the Most Out of a Sample Business Plan

sample business plans

The basic idea of a sample business plan makes perfect sense. If you haven’t done a business plan before, a sample plan gives you an instant idea of what you should include, how to structure it, and even what to write.

Bplans offers a library of more than 500 sample business plans across a wide variety of industries. Here’s how to get the most of any sample business plan.

What is a sample business plan?

A sample business plan gives you an idea of how another small business or startup in your industry built their own plan. A good business plan example will have all the elements your bank or angel investor (or venture capitalist) will expect to see when you ask them for funds.

The most important thing to remember when looking at sample business plans is that they’re samples (that’s why we call them that). They’re not pre-written plans that you can pick up and use right out of the box for your business. And anyone who tries to tell you that you can is wrong—or is trying to make a buck off of you.

Can I really write my business plan myself?

You don’t have to be a business planning expert to develop a business plan; you just need to know your own business. With that alone, you can use a sample plan as a tool to write a business plan that serves your business needs.

It can be as simple as a short, Lean Business Plan that serves as a strategic roadmap for your business, or as comprehensive as a formal business plan that instills confidence in bank lenders and investors.

This article will help you understand how to make the most of a sample business plan while avoiding some of the following common mistakes.

Download the Business Plan Template today!

Mistake 1: Looking for a sample plan that’s an exact match

Let’s say you’re opening a Pakistani restaurant. You’d probably have to look long and hard to find a sample Pakistani restaurant business plan. But right here on Bplans, you could find more than three dozen restaurant sample plans.

It really doesn’t matter if it’s an exact match in this case. An Italian restaurant plan will still show you the layout and structure of the document. Even specific things, like whether the tables and chairs you buy will be assets or expenses, will translate from one type of restaurant to another.

Look for a sample plan that’s a relatively close match, but don’t get hung up on the details. Because you’re the expert on your own business, the research you do to understand your target market, your competition, and your particular business model will help you fill in the details and really make your business plan useful and credible to potential funders.

Mistake 2: Assuming the sample is perfect

On Bplans and in business planning software like LivePlan, our free sample business plans are all real business plans written by real people. But that doesn’t mean they’re all perfect. If you are looking at a business plan and a piece of it doesn’t fit your business model or just doesn’t sound right to you, don’t be afraid to discard it.

Too often, people think a sample plan is a model, when really it’s just an example of what one person did. One size doesn’t fit all, so don’t try to cram your business idea into a sample plan just because it seems like it’s close.

Remember, if you just need a Lean Business Plan, not a formal business plan, shorter is better. The formal business plans you’ll find as samples tend to be extremely comprehensive. If you don’t need all that, don’t do it.

Mistake 3: Wholesale cut and paste

As already mentioned in the intro, a sample plan isn’t going to work as a pre-written plan for your business that you can copy and paste and hand to your lender. If you’re planning to open a pet boarding kennel, for instance, you might take one look at the Noah’s Arf sample plan and think your work is done for you.

While Noah’s Arf is a great example of a dog and cat kennel business plan, even if your business model and Noah’s Arf’s are identical, you can’t just swap out the names and call it a day.

Some of your business plan elements will invariably be different, so you’ll want to ask the following questions:

For instance, in the Noah’s Arf plan, full-time employees will be making $1,280 a month, which would be $8 an hour. That might have been fine in 2001, but if you were opening a kennel in the state of Oregon today, you’d get in big trouble with those numbers, since you’d be planning to pay your staff $.50 below the state’s current minimum wage. So be sure to edit thoroughly!

Mistake 4: Misunderstanding the business plan purpose

Your business plan should suit your business purpose. You don’t need a full formal business plan if you don’t have to show a plan to outsiders for some business purpose, such as a loan or an investment.

A Lean Business Plan is way easier to develop than a full formal plan; and for most businesses, the Lean Plan serves the purpose better. Every single business, whether you’re launching next week or have been around for 50 years can benefit from business planning.

It’s scientifically proven. If you’re doing it to give your company a better strategic roadmap, keep it short so you can easily review and edit it often. Form follows function. Don’t do what you won’t use.

So, for example, if you aren’t writing a plan for outsiders, then you probably don’t need descriptions of the product, team, or exit strategy. Just cover the key points—strategy, tactics, milestones, and essential numberswith simple bullet point lists and tables.

What’s the point of a business plan?

It might seem like turning out a printed document is the sole purpose of writing a business plan. But at Bplans, we believe that the most important part is not the finished product, but the process itself.

Whether you’re writing your business plan for your own peace of mind, to present to investors, or because a banker or advisor told you that you have to do it, there is tremendous value in the process of thinking critically about your business. You gain insight into your market, intimately understand your financial forecasts, and get a deeper understanding of the details of running your own business.

So when you find a sample plan that you think you like, don’t cheat your business by taking too many shortcuts. Use the sample for inspiration and guidance, and to get a clearer sense of what the necessary business plan sections really are. But do your own work, so you can reap your own rewards.

Visit the Bplans sample business plan library >>

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Sabrina Parsons
Sabrina Parsons

Sabrina has served as CEO of Palo Alto Software since 2007.



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Should You Stick to the Business Plan or Change It?

should you stick to the business plan or change it

Is it time for plan B?

The best and most useful kind of business planning is not just a use-once business plan, but rather a continuous process.

The first business plan is just the first step. For the rest of your business’s life, you review the plan once a month. Compare actual results to what you had planned, determine what steps to take to optimize, and revise the plan.

You’ll find that continuous business planning helps in many ways:

  • It helps maintain focus
  • You’ll be able to align the team with priorities
  • You can address changes in the marketplace as they happen
  • It helps you tune strategy and tactics to what’s working and what’s not working

It starts with knowing what happened

Review means comparing what actually happened to what you expected. Business plans are always wrong, so there will always be a difference between the plan and the actual results.

For the actual business numbers, such as sales, expenses, and such, accountants call the difference between the estimates in the plan and the actual results variance. Variance analysis looks at these differences to determine where the numbers are different, and in what direction.

You can do variance analysis on the numbers with a spreadsheet, or with accounting software. LivePlan can link to your accounting software and deliver automatic dashboard comparisons between actual results and the plan, and between actual results and previous results.

The illustration here shows an example:

should you stick to the business plan or change it

The Dashboard in LivePlan.

What’s important here is not the accounting or the calculations, but rather the resulting management. You look for indications of problems or unexpected positives, so you can react.

In the illustration above, revenue is lower than planned and expenses are higher. Operating income is less than planned. Cash and cash flow are improving, which is good news. However, that may be because this company is stretching out its payments, averaging about six months, which is seven times more than in their plan. So accounts payable is 25 percent higher than planned. That’s good because it’s helping with financing and keeping money in the bank, but may also be bad because it could be spoiling reputation and relations with vendors.

The point is the management, not the hard numbers. What should be done, given these results, to make the company better?

The monthly review meeting

The monthly review meeting is absolutely essential to real business planning—Lean Planning. The real value of business planning is the decisions it causes, and the management that results; and for that, you need not just a plan but a regular monthly review to track results and revise as necessary.

And the toughest part of the review meeting is this crucial question: Do we stick to the plan, or do we change it?

That comes up often because in the real world things never go exactly as planned. Business plans are supposed to set goals, tracking, milestones, and expectations.

The review meeting is when you ask:

  • What happened? What went right and what went wrong?
  • If I change the plan, then is my plan (forecast) versus actual result valid?
  • Doesn’t it take consistent execution to make strategy work?

These are valid questions, and there are no easy answers. You won’t find some set of best practices to make this easy. You’ll end up deciding on a case-by-case basis.

Hear more about changing business plans with Peter and Jonathan on the seventh episode of The Bcast, Bplans official podcast:
Click here to subscribe to The Bcast on iTunes »

The arguments for staying the course with your plan

I consider this an awkward, difficult fact about business strategy:

It’s better to have a mediocre strategy consistently applied over three or more years, than a series of brilliant strategies, each applied for six months or so.

Too often, management teams get bored with strategy before it’s had a chance to be effective. I was consulting with Apple Computers during the 1980s when the Macintosh platform became the foundation for what we now call “desktop publishing.” We take it for granted today, but back in 1985 when the first laser printers came out, it was like magic. Suddenly, a single person in a home office could produce documents that looked professional.

What I saw in Apple at that time was smart young managers getting bored with desktop publishing long before the market even understood what it was. They started looking at multimedia instead. They were attracted to new technologies and innovation. As a result, they lost the concentration on desktop publishing and lost a lot of market potential as Windows vendors moved in with competitive products.

That argues for staying the course. Strategy takes time.

The arguments for revising the plan

On the other hand, this is also true:

There is no virtue in sticking to the plan for its own stake. Nobody wants the futility of trying to implement a flawed plan.

Generally accepted best practices have changed over the three decades I’ve been focusing on business planning.

Back in the 80s, business timeframes stretched longer and many business leaders recommended sticking to the plan. But times have changed. You’ve probably dealt with the problem of people doing something “because that’s the plan” when in fact it just isn’t working. I certainly have. That kind of thinking is one reason why some web companies survived the first dotcom boom and others didn’t. It also explains why some business experts question the value of the business plan.

This is sloppy thinking, in my opinion—confusing the value of the planning with the mistake of implementing a plan without change or review, just because it’s the plan.

Download the Business Plan Template today!

How to decide: Stay the course, or revise the plan?

This consistency versus revision dilemma is one of the best and most obvious reasons for having people—owners and managers—run the business planning, rather than algorithms or artificial intelligence. It takes people to deal with this critical judgment.

One good way to deal with it is by focusing on the assumptions. Identify the key assumptions and whether or not they’ve changed. When assumptions have changed, there is no virtue whatsoever in sticking to the plan you built on top of them.

Use your common sense. Were you wrong about the whole thing, or just about timing? Has something else happened, like market problems, disruptive technology, or new competition, that has changed your basic assumptions?

Do not revise your plan glibly. Remember that some of the best strategies take longer to implement. Remember also that you’re living with it every day; it is naturally going to seem old and boring to you long before the target audience gets it. But do revise your plan if it is out of date, inaccurate, or based on false assumptions.

That’s why you have the plan in the first place: to manage your business better.

Note: Some of this material is taken from my latest book, Lean Business Planning, published by Motivational Press in 2015. A LivePlan version of it is available for download free at this link.

This article was originally published in 2015. It was revised in 2018.

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How to Write a Business Plan for a Subscription Box Service

starting a subscription box business

The subscription box industry is growing rapidly thanks to a steady revenue model and tapping into people’s love for surprises. Ipsy, Birchbox, and Dollar Shave Club are the premier companies doing exactly this and therefore reach the 15 percent of online shoppers signing up for subscription boxes.

But with so many people trying to get their share of the growth, many subscription box businesses fold within a year or two. Lots of new box companies have trouble ironing out the kinks in their process: their customer can’t easily unsubscribe, their boxes just aren’t exciting or well-curated, and more. Any of these can lead to failure.

There are several different types of business plans that can help you stay on track. If you’re seeking a bank loan or outside investment, you probably need a traditional business plan. But if you’re writing a plan as an internal guide for strategic growth, you should consider a lighter version—a Lean Plan. A Lean Plan can also serve as an initial plan that helps you think through all the aspects of starting your business.

This guide to writing a subscription box business plan will help you through the process either way. If you’re writing a traditional plan, you’ll provide more details and it will be more comprehensive. If you’re writing a Lean Plan, keep it shorter and think about making it easy to revisit and revise often.

A subscription box business plan will include the following components:

  1. Executive summary
  2. Your problem and solution
  3. Target market (intended customers)
  4. Marketing and sales plan
  5. Operations
  6. Team
  7. Company overview
  8. Financial plan
  9. Appendix (optional)

To help you get started, you can download this free business plan template for writing a traditional business plan for a loan or investment, or this Lean Plan template for a more nimble, easy to update plan.

1. Executive summary

The first element of every business plan is the executive summary. But, don’t write your executive summary first—it’ll be quite a bit easier to write after you’ve written the rest of the plan. It provides an overview of your business plan by compiling the most important information from the sections that come after.

Investors will read your executive summary first, so give enough information that they’re intrigued enough in your business to be interested in seeing your full plan.

This is what you’ll include:

  • Problem: State the problem your subscription box will solve.
  • Solution: How does your box and the products it contains solve that problem?
  • Target market: What groups of people will want your box?
  • Competition: What other subscription box companies target the same niche?
  • Team: Who are your coworkers and what’s their business experience?
  • Financial summary: Project your revenue for the first few years.
  • Milestones: List major long-term goals you hope to achieve.

starting a subscription box business

Opportunity: Proving there’s a market for your subscription box

Because you complete the executive summary last, you will begin your actual business plan writing process with the problem and solution section of your business plan.

Think of the opportunity as including the problem you’re solving, the solution to that problem, who you plan to sell to, and how your business fits into the existing competitive landscape.

2. Problem and solution

Defining the problem you’re trying to solve is an important part of your business plan because it’s the first place where you’ll demonstrate that idea is viable—that you can actually make money with your business model and idea. Your subscription box service could solve any number of problems.

Here are a few examples (but definitely not an exhaustive list):

  • Other boxes appealing to your niche are too expensive.
  • No box exists for your niche.
  • Online shopping for your product is difficult to some extent (hard to find, can’t return it, often doesn’t fit, so on).

Then, explain how your subscription box company solves the problem.

For example, if your box service will be cheaper than others in your niche, talk about your business model and how you’ll keep your box more affordable.

3. Target market

The target market section of your subscription box business plan identifies which subset of people you will focus your marketing and sales plan on. You can’t target everyone. If you’re selling a box that curates hair products for wealthy, curly-haired men, you probably don’t want to use your marketing dollars to advertise to people outside of your demographic.

Even narrower, not everyone who’s in your niche will want your box. A majority of men with curly hair probably have a product they always use, or they don’t use a product at all. The example box should, therefore, target men with that hair type who are looking for a new product.

Doing a formal market analysis can help you valid the assumption that people will actually pay for your box, as well as identify which people have the best chance of purchasing a subscription.

Additionally, you’ll want to have done some market research or analysis before you attempt to secure outside funding. Banks and investors will be looking to you to prove that you’ve had some initial sales success, but they’ll expect you to prove that you can continue to build your customer base in service of growing a profitable business.

The target market section of your business plan should include your TAM, SAM, and SOM, a brief buyer persona, your key customers, competition, and your pie in the sky future plans.

TAM, SAM, SOM

TAM, SAM, and SOM are three indicators that can help you think through how big your opportunity really is. In the beginning, your SOM is the most important number to think about. Most products aren’t really marketable to every single person with a credit card.

It can be tempting to think that you’re going to advertise to everyone everywhere—but that’s a huge and fairly unnecessary expense. Figuring out who can can really reach and get to pay for your product will save you time and money in the long run.

Understanding TAM, SAM, and SOM:

  • Total Addressable Market (TAM): If you’re selling a men’ hair product subscription box, you might say that every man with hair is your TAM. That’s probably not completely accurate. Maybe your TAM is actually every man in a certain income bracket that is fashion conscious and has his hair styled by a professional.  
  • Segmented Addressable Market (SAM): This is how much of the TAM you’ll target. The SAM for our example might be men with curly hair because you curate products specific to that style.
  • Share of the Market (SOM): Your SOM is who you will reach in your first few years of business. The example’s SOM would, therefore, be a percentage of men with, curly hair based on the number of orders your business model can handle. It could also narrow the SAM by selecting specific regions that its box will be available in.

Buyer persona

Creating a buyer persona puts you in the customer’s shoes to guide marketing and sales decisions. You can see what your customer needs out of your subscription box, and why they need it.

It also gives you an edge over competitors without one. Keeping your buyer persona in mind can help you as you develop your marketing and sales plan, and think through crafting messages to potential customers that will compel them to convert, or subscribe to your box.

Key customers

This section is for businesses that sell to enterprise customers, not consumers. Companies that become a big subset of your revenue are likely strategic alliances, though, which is a later section. A key customer for a subscription box might be a large organization that contracts with you as an exclusive provider of something they need.

Maybe your subscription box is a monthly curated selection of comic books. If you partner with a large, wealthy private school district who wants you to provide comic book packages to all their eighth-grade students every month, that contract might be key your business survival for a period of time. They’re a key customer because without their business, you’d be in trouble.

Competition

Name the other subscription boxes that appeal to your niche. The men’s hair product example would list Birchbox, Dollar Shave Club, Bespoke Post, and Luxury Barber. Describe their pricing, what sort of products they include, how many items are in each box, and so on.

An easy and visual way to do this comparison is with a competitive matrix. A competitive matrix lists the company names down the left column and particular features across the top row. Check marks indicate which company has which feature—you should construct yours to highlight why your box is different and better.

Then, explain how your subscription box service differs, and how those differences appeal to your target market.

Future plans

This section is for your hopes and plans for scaling your business. Maybe your comic book subscription plan eventually wants to branch into comic book merchandise curation in the future. Maybe you want to start marketing your subscription boxes at different price points to increase your available market share. Put those ideas here.

starting a subscription box business

Execution: How you’ll do it

Now that you explained your opportunity thoroughly, it’s time to describe how you plan to take advantage of it. Now, you’ll describe your marketing strategies, sales plans, operations information, milestones, your team and company basics, and your financial plan.

4. Marketing and sales plan

For many businesses, marketing and sales effort stops once a particular customer purchases its product or service.

Subscription boxes are nice because they’re designed to retain customers. But a lot of subscription companies bill on a period basis, like monthly, so you’re always thinking about how to retain the customers you have while you seek new customers.

Your marketing and sales plan should include a positioning statement, your initial pricing tests, tactics for promoting your brand, and information about any strategic alliances that are critical to your success.

Positioning statement

Your positioning statement should explain how your subscription box is different than competitors. Most statements follow this template:  

“For [target market description] who [target market need], [this product] [how it meets the need]. Unlike [key competition], it [most important distinguishing feature].”

Pricing

Next, it’s time to determine your box’s pricing.

There are a lot of factors to consider when determining your monthly price:

  • Product itself
  • Fulfillment
  • Packing materials
  • Transaction and platform fees
  • Labor
  • Postage and shipping

With the total cost of each box in hand, calculate a price with at least a 40 percent profit margin, as suggested by CrateJoy. Cratejoy also has other resources for calculating the best price for your subscription box.

There’s one final aspect of pricing to consider. Established subscription box services generally offer different rates depending on the length of subscription. For example, the men’s hair product box might cost $39.95 per month, but if you commit to subscribing for a year, its monthly cost will drop to $36.95.

If you do this, make sure the annual plan with cheaper monthly payments still generates a profit.

Promotion

Most of your outreach will happen during the pre-launch stage. Subscription box services primarily use social media (Instagram, Facebook, Pinterest, and influencers) to show off some of its curated products and give offers prior to official launch.

Get the email addresses of interested customers by advertising email sign-ups rather than pre-orders on your website and social media. You can then personalize your pre-launch marketing plan with emails to these interested people. This will keep your leads warm and encourage a higher percentage to subscribe once you launch.

Consider landing page design, easy email sign up, and potential deals for pre-subscribers during the pre-launch promotion as well.

One thing to be cautious of: how you advertise the products in your box. Not getting permission from the manufacturers on their product limits how much you can advertise it.

Strategic alliances

What vendors can you partner with to give you discounted or free sample products for your box? Let them know that they get cheap advertising by sponsoring your box.

Your business has a lot of potential if you can attain such partnerships. They save time by lessening your product curation efforts, and they make the overall product cost cheaper.

The example box might reach out to popular hair product brands like American Crew, Baxter of California, or Kevin Murphy to get free samples. Customers try each one in their box and decide if any are worth buying a full bottle of. If none work perfectly, they wait until the next month’s box, plus they don’t waste any product because the samples are small.

You should also explore other types of strategic alliances, like brick and mortar locations or selling through Amazon. These, among other ideas, can help your store reach new target markets, expand business operations, and improve profit margins.

Finally, an overlooked alliance is the one with each of your customers. Subscription models depend on customers staying for a while and increasing their lifetime value. Make the boxes personal and provide reliable customer service to grow your business and retain customers.

5. Operations

The operations section includes the logistics, technology, and other behind-the-scenes pieces of your business. For a subscription box service, this section will primarily focus on product curation and box distribution.

Sourcing, fulfillment, and distribution

Where will you get your products? How you will assemble them in your box. What packing materials will you use and how will you make the inside of your box aesthetically pleasing?

Then, talk about the box itself. Will you have a custom box designed, or will you keep it super simple at first? Will you outsource your packaging and shipping?

Once your business can’t run out of your garage anymore you’ll probably want to consider outsourcing some of the work. If you don’t plan on outsourcing initially (as most don’t), explain how you will handle box distribution. Your explanation should include how you will ship boxes, keep track of shipments, and any other logistics for getting your product to the customer’s door.

Deliver your boxes on a regular schedule—customers should receive their order within the same time frame each month (or whatever time period) to avoid confusion. Also, offer tracking information so they can see where their package is in the shipping process.

Startup costs

There are several expenditures you need to address before starting your business operations. Your startup costs will include acquiring your initial inventory, or the products you plan to include in the first edition of your box service.

You’ll probably also want to include your first round of shipping materials: filling, boxes, and labels. Say where you will get these and why that’s the cheapest option—you’ll likely buy these supplies in bulk. And if you’re paying for space for storage or packing operations, you’ll want to include that too.

Away from the box itself, you will pay for a website to process payments and advertise your service. Will you need an app? Think that through from the beginning too. You’ll want to think through which tool is essential from the beginning.

At first, you might get away with manually billing each of your customers each month, but it probably won’t be long until you’ll need tools to help with automated re-billing, order management, shipping label generation, customer management and more. The key for startup costs is to decide what you can’t live without from day one.

Milestones

Set milestones to show your business plan’s audience where you realistically see your company going long term. Add the milestone’s name, due date, budget, and person responsible to a calendar to put “some bite into your plan and management.”

Stay up to date with these milestones once your business gets off the ground; they will keep you and your coworkers on track toward your original goals. Schedule monthly review meetings within your team (or schedule time to review by yourself, if you’re starting out solo) every month to monitor your progress on each milestone.

Traction

No investor will give away money to an unproven business idea. Even if you haven’t launched your subscription box yet, run a minimum viable product (MVP) to demonstrate that people will pay for your box. This can be as simple as selling a beta version of your boxes to verify that people will pay for it.

If your business is already up and running, include the milestones you already achieved. “Traction” shows that your subscription box is heading in the right direction and is important to investors as proof that your business is viable.

Key metrics

Going smaller, use key metrics to ensure that your business is on track to reach your milestones.

The five key metrics to judge your subscription model’s success are:

  • Churn and churn rate
  • MRR (monthly recurring revenue)
  • ARPU (average monthly revenue per user/customer)
  • LTV (lifetime value)
  • CAC (customer acquisition cost)

Most business owners would be terribly concerned their sales stagnated. That’s one benefit of the subscription pricing model—a slower sign up rate isn’t always bad for your business. Use these five metrics to track how many people are continuing their subscription and to know when you need to address stagnated sales.

Key assumptions and risks

State the key assumptions and risks of your subscription box service.

Knowing your assumptions helps maintain the business’ consistency because the subscription box industry is always changing. They become even more important when you revisit and update your business plan in the future.

Additionally, acknowledging potential risks can guide your business to reduce its susceptibility to them. Investors want to know that you’ve thought about situations that could negatively affect your service business, plus ways to avoid them.

Issues related to credit card fraud is a big risk with any ecommerce business model. Address the security risk with your website, as well as how you plan to stop any sort of fraud.

6. Team

You want to make your management team attractive and credible to investors. If they know your subscription box idea will get customers, show them why you and your team are the ones to make it happen.

Name the people involved with your subscription box service. Your team might change as the business grows, though. You might outsource packaging, shipping or both instead of hiring more people to work with you directly. 

Explain your business qualifications, along with any business partners or key team members. Also, describe why they are passionate or knowledgeable about the niche your box specializes in. Why do they know how to curate products that will surprise and satisfy customers?

The Lean Business Plan Template

7. Company overview

In the company overview section, you’ll explain what your company values, how it will legally protect its products, follow certain regulations, and structure ownership. Include your business’ history and location as well.

Mission statement

The mission of your subscription box is what you ultimately want people to recognize the brand name for. A generic template for a mission statement is:

“The mission is to provide X (services) by doing Y (methods) for Z (target market).”

Keep it as short and meaningful as you can.

Intellectual property

Trademarking your business name, logo, and so on are the main intellectual property issues for a subscription box.

But if you have some sort of new technology or method that improves an aspect of your service, make sure to protect it with patents. That could be anything from improved packaging methods to automated product curation.

Legal structure and ownership

Each legal structure has its own pros and cons, so do your research so you can make in informed decision.

Location

Where is your distribution center? Is it in an optimal location for reaching your target market without expensive shipping costs? This might change at some point in the future if you choose to outsource it.

History

If you’re writing this business plan as a strategic guide and your startup is already up and running, talk about how it began. Highlight any major achievements you have already reached.

8. Financial plan

With so many fluctuating expenses to account for in the curation and distribution of your boxes, you need to make sure that you are still making a profit.

For a subscription box company, like any other business, there are eight elements you need to include in the financial section of your business plan.

Here are the components of the financial plan that you’ll need to include:

  • Sales forecast: There are two parts involved with your sales forecastannual revenue projections and cost of goods sold (COGS).
  • Personnel plan: How much will you pay each employee. Include “employee burden” costs as well—the cost of an employee beyond their salary.
  • Break-even analysis: Calculate when your business will break even and begin making a profit. Show what your profit numbers will look like from that point forward.
  • Profit and loss statement: Compare the revenue projections by time period with your expenses. The bottom line of a profit and loss statement is net profit, or how much money you’re making after all expenses are paid. Here’s a template to help you get started.
  • Cash flow statement: The cash flow statement helps you recognize what your startup’s cash position is—profit isn’t the be-all-end-all metric for the money you have. This statement tracks how much cash you have, where it’s coming and going from, plus on what schedule. Here’s a cash flow template you can use in Excel.
  • Balance sheet: Make sure your assets and liabilities balance out to show financial health. Your balance sheet is a snapshot of your businesses’ financial health. Here’s a balance sheet template you can use to get started.
  • Use of funds: Talk about where potential funding from investors or the bank will go and why the money is necessary there. Omit this bullet if you’re not seeking any funding.
  • Exit strategy: Name a few other subscription box services or outside companies who might want to take over if you decide to exit the industry down the line. Omit this bullet as well if you’re not seeking funding.

Appendix

Like with any appendix, add any charts, tables, pictures, or other necessary information that didn’t fit neatly into the business plan.

This section is not necessary—only include it if you have supplemental information that you need to cover.

Conclusion

Subscription-based business models are growing exponentially in all industries because people are figuring out how to maximize the profit margins, and subscription box businesses are one of the premier industries taking advantage of this new and popular business model. They supply customers with unique, curated products, and provide the excitement of the unboxing experience that no other industry can.

Before you enter this lucrative industry, ask yourself these seven questions to make sure it is right for you. Then, start working on your business plan—keep it as short and concise as you can so that it’s easier to use it as a tool to guide your business.

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Nate Mann
Nate Mann

Nate Mann recently finished his second year at the University of Oregon. He is pursuing a major in journalism, along with minors in business administration and computer science. He is currently a content marketing intern for Palo Alto Software. Outside of school and work, Nate is an avid basketball fan and writes about the Portland Trail Blazers for Rip City Project. He is also a data reporting intern for the University of Oregon’s School of Journalism and Communication.

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Why You Should Update Your Business Plan Regularly to Drive Growth

business planning for growth

I started an insurance agency two years ago. I had some friends who were all very successful in the industry, which led me to think that I would be blessed with the same fortune.

My business was in a highly competitive industry, rated as one of the best industries to start a new business in. Around 58 percent of businesses in the insurance sector survive longer than four years.

Things went well in the beginning, but just as I approached my first year, business started to slow down dramatically. It was like my business came to a halt.

The problem: Insufficient planning

My business came to a standstill.

I didn’t know what was wrong.

It was obvious that the market was saturated, but the insurance industry is evergreen and wasn’t going anywhere—I knew a significant number of people who were very successful with their own insurance firms.

I started to take a close look at my business.

After getting out an old document that was my business plan, I realized that I had reached the full potential of the plan I drafted when I first started the business. I also noted that I didn’t really leave room for further expansion, which explained a lot.

This was when I realized that I had to continuously plan for the future if I wanted my business to continue growing.

Even though life is unpredictable, many business-related aspects can be forecasted—often successfully.

The Lean Business Plan Template

Tips to help your business grow with a solid business plan

Because as my business became more established I basically ignored the business plan that I relied on when I started my business, I felt lost when everything started to slow down.

I was confused about what I could do to gain new customers. Thankfully, I wasn’t losing customers.

After a lot of research and dusting off my business plan, I was able to reverse the downtrend.

Below, I’ll share a couple of the lessons I have learned along the way.

1. Keep your business plan alive

Your business plan is not something that should be written once and then buried away.

Instead, it is a document that you should refer to frequently. Something that should be updated regularly and then compared to the actual results you’re achieving.

Keep your business in line with what is currently going on, as well as what you plan to come.

When you reach a goal, then mark it on your business plan and set out to reach the next goal. Sometimes these goals are called milestones and they can help you keep your business on track.

At least twice a year, schedule a day or two to plan ahead of time.

Ask yourself:

  • What worked in the last quarter? (Note: Do more of that!)
  • What didn’t work and why?
  • What can you do differently?
  • What goals would you like your business to reach in the next six months?
  • Where do you see your business in three years?

Focus on the short-term goals, but also plan for the long game. If you’re using a business dashboard, that can make it easier to see how your actual performance compared to your projections, and to model possible future scenarios.

2. Let your business plan be the light

As business owners, we are sometimes faced with an endless road of darkness.

I remember how much more effort it took to stay motivated and keep hustling. At times, it felt like things were over—there was little I could do.

When times are tough, you can quickly lose your motivation to rise to the top – or even to get back up and fight to keep your business alive.

Some businesses choose to give up at these times and I wouldn’t blame them. 

In these dreadful times, your business plan should be the light at the end of that dark tunnel. When you look at your business plan, there is a good chance that you will find some useful information that could reveal to you why you are going through your current situation. At the same time, you might just discover solutions you have been looking for by analyzing the data in your business plan.

3. Keep things organized for better decision making

A study that was published in the Personality and Social Psychology Bulletin explained how a clinical trial found being organized leads to improvements in cortisol levels, stress, anxiety, and even depression.

Especially in the business world, being organized will make a huge difference in your effectiveness.

When things are organized, it is easier to spot problems, as well as to make more accurate forecasts based on your company’s current situation.

4. Track your progress

How would you know how well your business is doing (or how poorly) if you don’t track your results and progress?

I was also a victim to this problem: When things were going great, I didn’t make time to look back and track how well I was heading toward my short or long-term goals.

Write S.M.A.R.T. (specific, measurable. action-oriented, relevant, and timely) goals in your business plan—dedicate an entire section to short-term goals and a separate section to long-term goals.

Add documents, scribbles, and anything else that has to do with your progress with your business plan.

Make some time every quarter to sit down and see how well you are really tracking so you can plan your next moves accordingly.

5. Keep it simple

A lot of people tend to overcomplicate a business plan.

While the document is important and will be extremely valuable for the future of your business, there is no need to compile an entire book.

Many businesses are turning toward a one-page business plan or Lean Plan to simplify things.

The single-page document would contain all of the most important elements of your business—a summary. I personally like to keep a one-page summary pinned at my desk, and keep the detailed information in the main document on my laptop.

As your business grows, so will your business plan and all the documents that go with the plan. Here’s a link to a downloadable template you can use to get started.

6. Consider your competitors

An often overlooked element of a good business plan is a thorough analysis of competitors.

You can learn a lot from watching your competitors. Competitor data allows you to see what they are doing, so you can decide if you should do the same or take a different approach.  If your competitors are doing something that works, consider copying them.

I used a variety of tools to help me gain valuable insight into how my competitors are marketing their products, who their target audience is, and what makes them unique.

Google is always a good starting point. Getting ahold of your competitor’s marketing material is another. If you come across a competitor’s customers, take a moment to ask them why they chose to do business with your competition.

By studying your competition, you may be able to pick up a few ideas to help grow your business.

Final words

Even though my business came to a standstill at one point and even caused me to lose some money, I did not regret starting my own company.

What I do regret, however, is that for a long time I didn’t pay enough attention to my business plan.

Only when my business seemed to be standing still did I revert back to my business plan, only to discover that the plan I had for my business mapped out all the success I had been riding all along.

Never underestimate the power of a business plan.

Frequently updating your business plan and comparing your real results to your forecasts will give you valuable insight to help your business grow into the future!

If you’re looking for sample business plans to give you a better sense of what you should include, check out Bplans’ examples specifically for insurance companies.

You can also download a free business plan template or even a Lean Plan template (it’s an alternative to a business model canvas) if you’re looking for a shorter version of a plan that can be updated quickly and easily on a regular basis.

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John Catibog
John Catibog

John Catibog is a business insurance broker and founder of Indagard Insurance Services. Based in Melbourne, Australia, John has an education in computer science, business and marketing and logistics. Combined with his insurance broking experience, he works closely with local business owners to cover the many risks they face in business today. John’s is a regular presenter on cyber insurance to protect against cyber risks. Over the years, John has worked in the healthcare, retail, and transport industries.

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