Get All Access for $5/mo

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.

Editor's Pick

Starting a Business

He Started a Business That Surpassed $100 Million in Under 3 Years: 'Consistent Revenue Right Out of the Gate'

Ryan Close, founder and CEO of Bartesian, had run a few small businesses on the side — but none of them excited him as much as the idea for a home cocktail machine.

Franchise

The Top 10 Coffee Franchises in 2024

From a classic cup of joe to a creamy latte, grab your favorite mug and get ready to brew up success with the best coffee franchises.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

'Jaw-Dropping Performance in 2024,' Says a Senior Analyst as Nvidia Reports Earnings

Nvidia reported its highly-anticipated third-quarter earnings on Wednesday.

Marketing

How Small Businesses Can Leverage Dark Social to Drive Word-of-Mouth Marketing

Dark social accounts for 70% of social media shares and is crucial for small businesses. Here's how you can tap into this hidden marketing opportunity.

Business News

'Do You Sell Cars?': Tesla CEO Elon Musk Trolls Jaguar Rebrand on X

The team running Jaguar's X account was working hard on social media this week.