The Ultimate Guide to Business Planning

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By William Ballard
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​Do you know what the highest paid activity in business is? Some might suggest it would be sales … or maybe even marketing … Truth is, it’s none of these. So, what could it be then? Well, the answer is thinking.

​Now, I know you probably weren’t expecting that, but the truth remains.
 
That said, for those of you who are new to me and our work, I’m probably most remembered for the statement: “Dreamers fantasize; thinkers materialize.”
 

You’ve probably read Think and Grow Rich (AFF), by Napoleon Hill, and are familiar with his statement: “whatever the mind can conceive, the body can achieve” …
 
Well, like you, we very much agree with what Mr. Hill wrote about. However, most have confused brain activity for thinking.
 
You see, our brains are constantly active, but that doesn’t mean thinking has occurred. Your brain is not your mind, and your mind is not your brain.
 
Consider this thought: Your brain allows you to see what is in front of you, but it’s your mind that allows you to think about what you’re seeing – to ponder.

Now, by making the statement I made above, I don’t mean to imply that we don’t view dreaming or fantasizing as a valuable activity. Quite the contrary, actually … in fact, it was Jordan Peterson who said, “Dreams are the birthplace of thinking.”  
 
That said, thinking is the first step to materialization. And it is through thinking that the activity of strategy and planning begins. In this article, we are going to provide an all-encompassing rundown of business planning, including an explanation of why business planning is important, a brief history of it, as well as the main elements of your business plan.
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What is Business Planning (and Why Does it Matter)?

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Business planning is a critical thinking exercise; and remember, thinking is the highest paid activity in business.
 
According to Simplilearn.com​, “Business planning is developing a company’s mission or goals and defining the strategies you will use to achieve those goals or tasks.”
 
That said, you’re probably familiar with the saying, “a failure to plan is a plan to fail.” Well, we’ve found that to be a very true statement in our line of work, and not just in the abstract.
 
You see, many of our clients, before they came to work with us, thought they had a great idea for a business and set out to launch it without a plan in place.
 
They possessed the entrepreneurial spirit we know and love but lacked the direction to get them to where they wanted to go, and their businesses ended up falling flat before they could even get it off the ground.
 
Here at William Ballard Business Coaching, we are of the belief that entrepreneurship is the essence of creating something out of nothing. And there really is nothing quite like it.
 
However, this entrepreneurship journey is not for everyone. And most importantly, should never be done on impulse. In other words, impulsive behavior is the enemy of entrepreneurship.
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The History of Business Planning

The Author of the First Written Business Plan

Pierre Samuel, Sieur du Pont de Nemours - Picture Credit: Hagley Museum & Library

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Much as has been written about business planning and how to write a business plan, and truth be told, not much has changed. From parchment to online presentations, the result is ultimately still the same.
 
That said, it’s possible that the first business plans were etched on tablets by our ancient ancestors when it came to their farming enterprises or building projects. However, according to WiseBusinessPlans.com, they credit the first modern business plan to Pierre Samuel, Sieur du Pont de Nemours back in the 18th Century.
 
They go on to say that before Samuel and his son, Eleuthere Irene, left France in 1799 to start a gunpowder mill in Delaware, they wrote several letters to potential investors that included a plan on how their mill would make a profit -- their business plan. 
 
Well, certainly, this business plan of theirs was a wise move because it allowed them to secure the funding they needed for their venture, and today that operation is known as the DuPont Company.

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Business Planning Terms to Know

​When you first enter the world of business things may seem very overwhelming. You start hearing things like business cycles, business models, the five stages of business development, and the list can go on and on.
 
That said, it is not our desire to confuse you here, even more than you may already be. In fact, that’s the whole purpose of our firm, to make things as clear and plain as possible.
 
This is why we’ve broken up our firm into four main divisions: 1) business planning, 2) business execution, 3) business management, and 4) business development.
 
Within Business Planning, the main terms you need to know or be aware of are the following:
 

• Business Ideation – We refer to this as Business Creation and we’ve broken this down into three main stages, 1) dreaming or fantasizing, 2) business concept (which includes analyzing business models), and 3) developing a business story or narrative.

• Market Research & Analysis – You’ve probably heard of things like SWOT analysis, demographics, competitive advantage, unique selling proposition, or value proposition. All these things we will cover here, but for now, what’s most important is that this is how you will determine what problem it is you’ll solve in the marketplace, and who is more likely to buy your products or pay for your services.

• Business Structures – This is where we cover the legal aspects of business planning. Some of the most common business structures are Sole Proprietorship, Limited Liability Companies (LLC), Partnerships, Close Corporations, and Corporations.

• Vision & Mission Statements, and Core Values – It’s been said the people perish without a vision. This is where you learn how to develop the personality of your business, and ultimately the culture it will form. We refer to them as Guiding Principles. 

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• Financial Analysis & Projections – Finally, this is where we cover some of the most important, but not always the most fun, documents of your business. Of course, we’re talking about income statements, balance sheets, and cashflow statements. 

​The Pros & Cons of Business Planning

​Business planning, provides a bird’s eye view of the entire organization you wish to bring into the world, or to the marketplace. It provides several benefits and here are just a few:

• It establishes clear objectives and benchmarks. It provides Key Performance Indicators (KPIs) that are necessary to help reach goals.

• It helps to allocate resources. It brings order to chaos. It provides a logical perspective to each facet of the business. Also, it helps to estimate the financial impacts certain actions can have on the business.

• It enhances a company’s viability. I mentioned before how dreamers fantasize, but thinkers materialize. Well, business planning is what activates thinking, which then begins the materialization process. In other words, it is the bridge that brings dreams into reality.

• It aids in decision making. Starting a business and running a business requires making a lot of decisions – where will you locate, what will you sell, how much will you charge – a well thought–out plan helps in your ability to anticipate shifts in the marketplace. It allows you to come up with solutions to problems well in advance.

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• It provides confidence. Not only does to it develop confidence in you as the business planner, knowing that you have a clear blueprint to follow as you build your business and bring your dream into reality, but it also secures confidence in would be investors.

 
​Nevertheless, the are some entrepreneurs who struggle with this stage. They struggle with taking the image they have in their mind and making it clear and concise, as well as interesting and informative on paper.
 
However, there are ways around this. You can streamline your business planning initiatives by subscribing to our newsletter and taking it piece by piece.
 
Or you can dive right in and start taking advantage of our business coaching services, or enrolling in our core program, The Entrepreneur’s Secret Weapon.
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The 5 Core Elements of a Written Business Plan

​There is much to learn about writing a successful business plan, and we share quite a bit about in our newsletter, but as promised above, here are the five main elements of your written business plan:

• Introduction & Overview: In this section you’ll provide your Executive Summary and the basic background of your business. This includes your vision and/or mission statement, as well as a brief look into your company’s leadership, employees, operations, and location.

• Business Information: In this section you’ll go more in depth when it comes to sharing information about who your founders are and what form of business you are looking to get into; for example, wholesale, retail, or a service type of business. Also, this is where you will share the product (or service) you will provide and what problem that product/service solves within your target market. This will also be the section where you will provide your Unique Selling Proposition and/or Value Proposition.

• Market Opportunity & Industry Analysis: In this section you’ll describe the overall market in which you will be doing business. You’ll provide an economic outlook for your industry, including who your competitors might be. This section should describe how your business will fit in the market, who your ideal target client or customer will be, and this will also be where your SWOT analysis will be presented.

• Operations & Management: This section is where you’ll describe what the legal and regulatory requirements (compliance) will be, where your physical location will be and what it will look like (it’s layout, etc.), your procedures, policies, and processes or systems, as well as what your staffing will look like (positions, job descriptions, performance measures, etc.). Moreover, you’ll describe what your product inventory will look like and what the pricing will be for each product (or service). Lastly, this is where you’ll share your marketing plan, which is often referred to as the plan within the plan.

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• Financial Overview: In this section you’ll provide a financial analysis of your business. This will include financial statements such as the income statement, balance sheets, and cashflow statements (or for those that are just starting, your future projections). This is probably one of the most important sections of the written business plan (outside of the marketing plan), but not always the most fun. It’s important because it’s what investors will spend most of their time looking at when determining whether your business is worth investing in or not.
  
  

To become laser focused within each section of your written business plan, we encourage to join our newsletter where we break each section down more in depth, and make it as clear and plain as possible.

Business Planning Resources

​For inspiration, check out entrepreneur.com and inc.com.
 
If you are interested in owning a franchise, I would recommend checking out franchise.com, as well as the Small Business Administration.

For a more in depth presentation of business planning, I would encourage you to check out Entrepreneur’s Business Planning rundown.
 
Finally, consider checking out the following books:
 
This is certainly not an exhaustive list but will give you a good start on your entrepreneurial journey.  Also, these do contain affiliate links and we will receive a small commission if you decide to purchase any one of these (or all), but doing so is at no extra cost to you – and we appreciate the support.
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• Start Your Own Business: The Only Startup Book You’ll Ever Need, by The Staff of Entrepreneur Media
• Write Your Business Plan: Your Strategic Roadmap to Business Success, by The Staff of Entrepreneur Media
• How to Grow Your Small Business: A 6-Step Plan to Help Your Business Take Off, by Donald Miller
• Business Made Simple: 60 Days to Master Leadership, Sales, Marketing, Execution, Management, Personal Productivity and More, by Donald Miller
• Business Model Generation, by Alexander Osterwalder & Yves Pigneur​

• Everyday Business Story Telling: Create, Simplify, and Adapt a Visual Narrative for Any Audience, by Janine Kurnoff & Lee Lazarus
• Testing Business Ideas, by David J. Bland & Alex Osterwalder
• Value Proposition Design: How to Create Products and Services Customers Want, by Alex Osterwalder, Yves Pigneur, Greg Bernarda, & Alan Smith
• Your Next Five Moves: Master the Art of Business Strategy, by Patrick Bet-David & Greg Dinkin
• Choose Your Enemies Wisely: Business Planning for the Audacious Few, by Patrick Bet-David & Greg Dinkin

​Final Thoughts

​In closing, we appreciate you taking to read this piece and we hope you’ve gained a lot from it. Now, you should have an idea of why business planning is important, know a brief history of business planning and the first written business plan, as well as the main elements of a written business plan.
 
To become laser focused within each section of your written business plan, we encourage to join our newsletter where we break each section down more in depth, and make it as clear and plain as possible.  We’ll see you inside! 

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