Is the Formal Business Plan dead?

Is the Formal Business Plan dead?

If your business doesn't have a formal business plan then you are not alone as most small businesses operate without a “written” plan. Some have goals but few have plans to achieve the goals and operate by dealing with issues as they arise.

Traditional Formal Business Plan

Traditionally, the best tool for planning a business was a formal business plan. There are still many good business books which provide in depth detail for the creation of a complete business plan. If your business needs financing, most likely you have already been forced to create a formal business plan which took a considerable amount of time.

Once written the traditional business plan usually turns into that archived document sitting on a shelf somewhere collecting dust. It really should be used as the playbook for your business and help you clarify the trouble areas in your business and help you plan to resolve any issues.

Also, one of the most important aspects of the formal business plan is the ability to clearly communicate to other people what your business is all about. The ins and outs and how you are going to achieve success.

If formal business plans are so important, why don’t more business owners create formal business plans? The answer in almost every case is that lack of TIME is perceived to be the problem. Many other reasons have also been raised over the years, such as cost and utility of a formal plan.

The bottom line is that formal business plans are not being done and business owners like you and many others are taking on much more risk because of it.

Time for a new tool!

In recent years a new tool has been developed to help address the business planning dilemma. This new tool is call the business model canvas. This isn’t a replacement for the formal business plan but it certainly provides a good overview of your business model for your business.

The business model canvas can help you quickly answer questions about your business such as key activities, value proposition, customer relations and more. Also, once completed the canvas can be used to easily communicate your core business to others in a clear and concise manor.

The new business model canvas tool is fun and easy and really does provide a clear picture for your business and help you remove some of the risk from your business before it occurs.

Watch the following video for a quick overview of the business model canvas:

Business Model Canvas explained.

You can find many more resources for the business model canvas online with freely downloadable templates and apps to help you out. You can start at the source: businessmodelgeneration.com

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