Pound Cake: The Business Plan Recipe
If you search the words “business plan,” the information that comes back might make your head explode! There are a vast number of examples, templates, and even companies that you can pay (a lot of money) to write the perfect plan for you. Maybe some people have told you, “Nah. You don’t need a written business plan. What’s the point?” But then, maybe there are others who tell you that before you even begin your new business endeavor having a formal plan is imperative. So what are you supposed to do?
Some years ago, my father bought me a cook book. The book was filled with pages of glorious blue ribbon desserts. As I combed through the pages of this new book, one thing stood out to me. It was the way they explained how they arrived at this final perfect recipe. In their test kitchens, they tried so many different possibilities. This flour, that butter, leavening, sugars, and oven temperatures. Before going to print, they tried their final recipe many times over.
Before You Write, Test the Plan
The same logic can be applied to a business plan. A formal business plan, just like your printed recipe, is designed to be presented. Whether it is for possible financial investors, partners or a board of directors, you want the reader to be confident that you have done the work; that your plan is not a theory and will and does work in practice. It is important to have tested your plan before putting in ink. Just like grandma’s perfect pound cake, she never measured anything. For you, however, to pass it on, you have to measure everything. You know in your mind exactly what you want your business to do. You have done your market research, projected financial investments and profit and have a clear mission. But just like the written recipe, your formal business plan creates a blue print of standards to which you will adhere. Because you have been working your business, you have a clear understanding of what does and doesn’t work. And just like with the written recipe, you know when and how any changes will affect your plan, and what does or doesn’t work.
Once you have actually begun working on your business, the plan, in essence, writes itself. Through trial and error, of course, you mix all your ingredients, follow specific steps, and eventually, have the recipe that is ready to share with the world.
Here’s my business plan recipe. These are the key ingredients that I think make for a simple, yet effective plan.
Before you begin, grease and flour your 10” bundt pan.
3 cups of Customer Analysis – All purpose flour
All recipes, whether savory or sweet need flour. The reason why this is the first ingredient is because there is no business without customers. Knowing who they are and why/how they make their decisions to buy is the key to your success.
3 cups of Industry & Competitive Analysis – Sugar
Sugar is the only thing that can do its job. White sugar or brown sugar, there really isn’t anything that can take its place. Just like knowing who your customers are, knowing your industry is equally important. Is it on an up-trend or a down-trend? How much money was spent in this industry last year? Who are the leaders and who is my industry competition. What strategic alliances can I form? Your success hinges on these points.
6 Whole Marketing Plans – Eggs
In a cake, one egg probably won’t get your too far. And in business one marketing strategy won’t either. It’s not enough to turn on the lights and flip over the open sign. Your plan for marketing is like the eggs in your cake; it holds the whole thing together! You know your industry standards, who your competitors are and who your target customers are. But if they don’t know you exist, the whole thing falls apart! How are you going to bring them in the door? You aren’t going to mail postcards to teenagers (they won’t read it), and you aren’t going to rely on social media to advertise to senior citizens (they are too busy reading the newspaper/mail). Understanding how your customers want to communicate is imperative.
1 cup of Company Overview – Heavy Cream
Some recipes call for more, some less, but usually, just a cup will do. The liquid in every recipe is different, but necessary just like your overview. Imagine that the person reading your business plan document has never heard of you, and doesn’t know anything about your business. What should be their take-away? What do they need to remember about you and your company? This is the meet-and-greet section of your business plan. If you were to eloquently write down your elevator pitch, you could put it in this section. Keep this brief, as you’re going to be expanding on what you say here in the next few sections.
2 sticks of Mission, softened – butter
Baking is a science and so is business. Your mission, like butter is not only what holds things together, it also gives flavor. Your mission, whatever it is, is what your customers, investors, partners and employees “taste” in everything you do. Like the butter, you want your mission to be soft and easy to work with or understand. A mission statement laden with industry and scientific jargon won’t go down easily. Keep your language simple but compelling. While you’re thinking about your mission, mix the sugar and butter together until it’s fluffy.
½ teaspoon of Financial Planning- baking powder
This doesn’t seem like a lot of financial planning, but like your baking powder, a little goes a long way. You have to know how much money you need to start your business as well as how much it will take to sustain and grow. Without an “active” financial plan, your business, like your cake without leavening, will fall flat.
½ teaspoon of Operational Planning- salt
Finances and operations work together like leavening and salt. Your business needs a clear plan on how it will operate to thrive. As you develop your strategic plan, your plan for how you will operate your business is like the steps to those bullet points in your strategic plan. Like salt, how you will operate may seem like a tiny piece to the plan but it is absolutely necessary. And like salt, you can tell if it is missing.
2 teaspoons of Management Team- vanilla extract
Just like there are many different flavors of extract on the shelves, there are many different styles of management. I’ve chosen vanilla, but feel free to use whatever suits you best. Even personally, speaking you could be a hands-on or a hands-off manager. Maybe you want your business to be co-operational where everyone has a hand in how things are run. Maybe you want one person to lead the charge. Maybe you need supervisors in multiple areas to bring the whole thing together. Whatever flavor you chose, be sure that it is best suited for your taste as well as the people who will be working for and with you.
And we can’t forget the icing!
The first thing that is read in your business plan is your executive summary. But most suggest that this is the last thing to write. Why? The summary gives you a hint to everything that is in the pages to follow. When a cake is beautifully decorated, it makes you want some. If it’s not, people will just walk by. The same can be said for your executive summary. If it is not well-written, your audience is not going to want to read any further. After you’ve finished your business plan and have put all your “ingredients” together, you look back and sum it all up. Make it inviting and appealing so that your reader will look forward to learning or tasting more of what you’ve offered.
To frost this cake you will use 1 cup of powdered sugar, 3 tablespoons of milk and the flavoring of your choice. Mix it all together until smooth.
There are, of course, many more pieces to a business plan, depending on the type of business you have created. Those optional ingredients are all up to you.
For some extra added fun, if you mix the ingredients I have listed, you will ALSO have one of my favorite pound cake recipes! Now, turn your oven to 325 degrees. There’s no preheating in this recipe. Bake it for 1 hour and 15 minutes and DO NOT open the oven. Let it cool for at least 15 minutes before icing.