When creating a business plan, you can choose to create a document for internal use, or one for sales purposes to send to investors. You can also choose both options by having some extra internal pages that you can hide when sending the document externally.
Because most entrepreneurs create business plans for investors, it’s very easy to compile the document and then never use it again. Instead, especially when many decisions are still outstanding, the business plan helps entrepreneurs keep track of progress.
Many business plans are also confusing, describing a business goals or traction as achieved, when it’s often only planned. It’s easy here for the reader to be confused about what has been achieved and what is still only wishful thinking. On the other hard, may entrepreneurs forget to write about all the steps and achievements that they have already taken and achieved, which is arguably one of the most important pieces of information to communicate.
Creating a customised gap analysis for your business plan solves this problem. Whereas the detailed operational plan may be uninteresting for an external reader, it is very important to you. So while writing a convincing business proposition, you can add a gap analysis at the end, together with a list of activities, to keep track of how much you have completed so far, and how much is still outstanding.
Here you can list your initial resources and situation, and compare them to your goals, you can list missing information or open questions or decisions, that you can get back to later. You can also list the key information in every chapter when you have longer or information-rich documents, which helps you write an executive summary at the end.
I recommend doing this for every chapter of the business plan, so that in the end, you will have an operational plan divided by subject. This is something that you can extract as a separate document and use in your day-to-day activities.
Additionally, business plans may have to be reused for new business partners or investors fairly often for early-stage businesses. Having an operational plan linked to your business plan, and keeping it up to date, makes it a lot quicker to update only the relevant sections of the document when needed.
Every chapter also provides important financial information. Creating a realistic financial plan is a step-by-step process, and every section or function of your company (Company Overview, Validation, Product, Market, Strategy, Operations, Financial & Investment Highlights) will have specific goals. In order to reach those goals, there are expenses, which can take place regularly or as a one-off investment: keeping this in mind when planning helps ensures that no important expense is forgotten, and that it is linked to a specific start date, in line with your operational plan. Doing this exercise helps prioritise budgets and calculate more precise cash flows.