Do You Really Need a Business Plan? Collective Liberation and the Confidence You Crave

So, you want to start a business, or maybe you've been operating a business but never really had a plan. You've heard a good business has a business plan. Maybe you've even done a quick Google search. But then you were utterly overwhelmed by the complexity of what goes in a business plan. You don't even know where to start with it! You're in the right place! I thrive in explaining things like this to folks like us. People operating on the self-employed or freelancer scale of businesses.

This is also a queer anti-capitalist and anti-ableist bent on business plans. The tl;dr version of this article is: if you don't have a business plan, and your business is doing fine... keep doing what you're doing! A business plan IS OPTIONAL. Business plans come from and reinforce so many systems of oppression. And we're trying to evolve beyond colonizer patriarchy white-supremacy bull crap, right? RIGHT! This article strives to demystify what a business plan is, and show you the parts that are most relevant to us.

What is a Business Plan?

A business plan is just a standardized format for a document. Similar to how a resume takes a common form, a business plan has some common areas and features. A resume tells the reader about an individual's skills. A resume seeks to persuade the reader to believe the individual is a perfect fit for the job. A business plan serves a parallel function for a business or business idea. The business plan demonstrates that the author has thoroughly thought through their idea. It seeks to persuade the reader that the author's business is a sure bet. The reader of a business plan is typically an investor or lender. The reader is looking for the author to "show their work" on why they think their business will be successful. A successful business means the reader will get their money back. If they're an investor, their investment will grow in value. If they're a lender, then their loan will be repaid in full with interest.

What is a Self-Employed Business Plan?

It's important to think through all the facets of your business. You need to know what you’re doing and have confidence in your plan. But self-employed businesses don’t really need to explain it to anyone else. It's not that useful to craft a formal 20-something-page document where you explain every facet of your business to an outsider. Solopreneurs have to wear so many hats. There's so much to do and only YOU to do it. It's a far better use of your time to execute on things rather than defend them to a non-existent lender or investor!

That's where this series of articles comes in. This article gives you an overview and generally demystifies things. We're going to walk through all the parts of a business plan. You'll understand each standard part of a business plan. By understanding the behemoth that is a "Business Plan", it will become less monolithic. The subsequent articles will go more in-depth in each area. Reading more about each part of a business plan will let you get clearer. You'll understand what areas you’ve already got covered, and what areas you need to learn more about. This will illuminate the things you didn't know you needed, and offer avenues to learn more. So let's get started!

The Parts of a Business Plan

(1) Executive Summary & (2) Company Description

These 1 to 2 sections are an overview of topics that you’ll go in more depth into later on in the Business Plan. Many people find it easiest to write these parts last. Start by figuring out all the details in all the other parts. Then just summarize it all.

(3) Products & Services

Here you'll describe what you sell. This includes going into the competitive advantages and disadvantages of it. You'll also share your pricing. This might be very straightforward for your business idea. But for plenty of self-employed businesses, it is not. Either way, you've got to explain it so random-dude-at-the-bank can understand.

(4) Marketing Plan

This section covers everything you know about your market. Plus, your strategy and tactics for positioning and launching your business into that market. This means you'll describe your market, industry, customer, and competition. Then outline a robust marketing strategy responsive to all those things. Followed by a sales forecast that you expect that marketing to result in. In a traditional business plan, this needs to be thorough and detailed. This is key to how the reader will believe they'll get their money back. For self-employed folks, you are your only investor. Your thought process should leave you feeling that the money you're risking will be worth it. If all you're risking is time and lost wages, you might be comfortable with trial and error. Definitely more comfortable with it than an investor!

(5) Financial Plan

This is what you have and what you hope to have. You document the resources you have in a personal financial statement. Then you make projections on how your business' finances will go in the format of some standard reports. A reader will examine the numbers you're coming up with and the assumptions you're making to get to those numbers. The reports include a budget of your startup expenses, a break-even analysis, projections for a 12-month Profit and Loss Statement, cash flow, and 4-year profits. Those formal reports might not be helpful for self-employed businesses. But the thought process definitely is! Know what resources you're drawing on, and have a sense of how long they will last. Know that when your business is up and running you'll be well paid and not overworked.

(6) Operational Plan

This section describes the daily operation of the business. This includes its location, equipment, people, processes, and surrounding environment. That "surrounding environment" includes the legal environment. Most of this is straightforward for self-employed businesses. The biggest area to pay attention to is the "legal environment" (e.g. what licenses you need and things like that.)

(7) Management Plan

This is where you talk about the people in the business. You provide an org chart and position descriptions for key positions. The key part of this for every business is the person managing the day-to-day. A traditional business plan goes in-depth into the experience the business owner-manager brings. Self-employed businesses usually got this part in the bag. Though if you will need staff, you need to have a plan for their roles, etc.

What's Not in a Business Plan

Now that you've read through what is in a business plan, let's talk about what's not in it. Our society is very short-sighted on its goals. Nothing in a business plan asks how goods are disposed of when they're at end of life. Resources that you own need not be stewarded to any particular standard. There's also no discussion of social good. A business plan is not required to address how the business will support people, communities, and natural resources. There's a place to talk about meeting environmental laws, but nothing about going above and beyond what's regulated. Taking advantage of people, communities, or natural resources can even be described as "good business practices." A business plan serves a very specific purpose within a specific societal norm. I think we can do better. I hope when you're making your plan, you're considering what ripples your business makes. How your business impacts people beyond your customers and workers. And that your business' impact is contributing to our collective liberation.

Think it Through

As a self-employed business, you do need to think through what you’re doing. You need to have a plan. You don't need that plan to fill dozens of pages. You can write it on the back of an envelope or save it as a note on your phone. The plan doesn't need to inspire an investor. It does need to be grounded in the reality of your bank account. And any area you lack skills in you can learn and find others to help.

More articles are forthcoming, but tell me: What areas do you want more info on? This is just a starting place for learning! Leave me a comment and let me know what else you’d like to learn.