Ending Soon! Save 33% on All Access

It's Time to Rethink the Business Plan Outline Use these tips as a guide to help you make the most of your time when creating a business plan.

By Tim Berry Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

Last week I answered an e-mail from a woman who wanted to know what to include as a "fulfillment and delivery" category in a business plan for a gym. Her problem was that she didn't see how that general topic--fulfillment and delivery--applied to a gym business.

I gave her two specific answers to that question:

  1. Don't include it. It doesn't apply to your business. Delete that topic from the outline you're working on and go from there.
  2. Fulfillment of a service in a gym business is about: hours that it's open; equipment; services like massage, physical therapy and personal training; locker rooms; laundry and other facilities.

I like the first answer better, frankly, because it helps debunk the myth of a standard business plan outline. That's particularly sensitive to me because of my involvement with Palo Alto Software, which I founded, and Business Plan Pro, which I actively support. I've said before that the most common mistake made by business plan software users is accepting the standard outline and its content as a rigid checklist.

Whatever business plan outline, tool or format you start with--Business Plan Pro, Microsoft Office, a book, magazine article, website recommendation or whatever--is going to be more useful to you if it's recognized as a tool, a guideline and a set of recommendations rather than a checklist.

Every business and every step in its history is unique, so a good business plan should also be unique. It matches what your business needs, not what the standard says.

For example, take the management summary that's almost always included in the standard business plan outline and business plan contents. It describes your management team including key members, their functions, their professional backgrounds and their accomplishments.

However standard as that piece of the plan might seem, it's often completely irrelevant. While every company should manage itself and steer its growth with planning, not every company needs a formal business plan document with a carefully prescribed outline and a complete list of standard contents. If you're running a business that doesn't need to find investors or borrow money from a bank, then you probably don't need to describe yourself (that is, your management team) to yourself, so that chapter is a waste of time. And if it's a waste of time, don't include it.

I could cite a lot of other examples, but I'll settle for two more. First, although most standard outlines include a company summary with history and ownership and such, that's silly when the plan is for your internal management and growth, not for outside readers. Second, although most standard outlines don't include the exit strategy, a business plan for investors needs to have an exit strategy because without it investors aren't interested.

I've dealt with this myth a lot in my 20-plus years involved in the business plan software industry. People think that business plan software imposes a standard outline or standard content--because a lot of bad business plan software does. But it shouldn't. Good business plan software suggests an outline and some standard contents, then fades into the background and lets you decide.

In fact, if there's one most common error in the use of business plan software, it's using the standard default outline without considering what does and doesn't apply to your business.

Tim Berry

Entrepreneur, Business Planner and Angel Investor

Tim Berry is the chairman of Eugene, Ore.-Palo Alto Software, which produces business-planning software. He founded Bplans.com and wrote The Plan-As-You-Go Business Plan, published by Entrepreneur Press. Berry is also a co-founder of HavePresence.com, a leader in a local angel-investment group and a judge of international business-plan competitions.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

'Creators Left So Much Money on the Table': Kickstarter's CEO Reveals the Story Behind the Company's Biggest Changes in 15 Years

In an interview with Entrepreneur, Kickstarter CEO Everette Taylor explains the decision-making behind the changes, how he approaches leading Kickstarter, and his advice for future CEOs.

Career

Is Consumer Services a Good Career Path for 2024? Here's the Verdict

Consumer services is a broad field with a variety of benefits and drawbacks. Here's what you should consider before choosing it as a career path.

Business Ideas

87 Service Business Ideas to Start Today

Get started in this growing industry, with options that range from IT consulting to childcare.

Business Models

How to Become an AI-Centric Business (and Why It's Crucial for Long-Term Success)

Learn the essential steps to integrate AI at the core of your operations and stay competitive in an ever-evolving landscape.