Framework for creating a (real) Business Plan

Recently I was looking for some help (guide, tool or template) for documenting a business idea, related market opportunities and other details to create a comprehensive business plan. The templates and guides I managed to find on the internet, were about creating (executive) business-plans targeted towards venture-fund audience. But I was not thinking about funding yet (venture or my own). I wanted to organize my thoughts around a business idea and iteratively improve them. Finally I devised my own methodology (framework) which I present here.

In this article, I propose a framework for systematically organizing information required and related to converting an idea into a business plan - A framework to create a real “plan” for a business idea.

A framework can be defined as a logical structure that organizes for a specific subject, a set of related artifacts, shows the relation of the artifacts of the chosen subject area, and brings a totality perspective to hitherto individual ideas. A framework, therefore makes, the unorganized, organized and coherent.

A framework that helps structure and organize a business plan should have the following characteristics.

1. It should provide a structure for organizing information that defines the scope of the business and how the areas of business relate to each other.
2. It should help in comprehensive and impassionate analysis of the idea as an investment opportunity.
3. Help prioritize and identify your core competencies enabling you to assign key resources to critical needs first.
4. Help identify and mitigate potential risks in your selected paths of action and investment.
5. It should help in clearly identifying and segmenting the market opportunity
6. Guide in estimating the investment required to start and sustain the business.
7. A summary extracted from such framework should serve as an executive business plan for venture funds.
8. Finally, the framework should be easy to understand and use, and should not require knowledge/usage any specific tool(s).

The Business Planning Framework (BPF) I propose is inspired by the Zachman Enterprise architecture framework, which in turn is inspired by the descriptive representations(the architecture) of buildings, aeroplanes and other complex industrial products.

The BPF is a classification schema, represented visually as a table of columns and rows. Each row represents a distinct view of the business, from a unique audience perspective. A row is allocated to each of the following audiences

• Theorists - Generic/Reference contextual view of the business
• Owner / Funder - Has a conceptual view of business and its processes
• Planner - Strategic view of the business
• Executor - Nuts and bolts view of the business
• Competition - A perpsective and analysis of competition

The columns of the framework consist of six functional areas best described by a set of interrogative questions –

• What – The product / service that constitutes the idea
• How – Strategies for running the business
• Where – Location of the business and its related entities
• Who – People; customers, partners, executive team and employees
• When – Schedule of important events from pre-inception to succesful running of business
• Why – Motivation for the business. The customer pain points your business addresses. The cost your customer will be willing to pay you for the product/service.

	What	How	Where	Who	When	Why
Contextual Scope	eg: List of products and services.	List of processes the business performs.	Types of locations.	List customer segment, org. structure...	typical lifecycle of business.	goals and strategies of the business.	Reference model
Conceptual Scope	brief desc. of idea	Overview of core business processes. eg: marketing	list ideal locations.	Potential customers, partners. list founding team members.	high level schedule plan.	Identify the customer pain points that this business will address.	Owners / Investors
Planning	Detailed Product / Service specification. eg: Entity-Rel, workflow diagrams.	eg; marketing strategy, essential partnerships.	location and logistics	Segment your customers (ex: by age). org structure for development/delivery.	Master schedule	ex: identify each pain point and	Business Planners
Execution	eg: phased development, agile methodologies.	ex: Business process models for core business functions.	Systems, Hardware	ex: Identify the market size for each segment (numbers and purchasing power), class diagram for detailed org-structure	Component schedule	Cost structure for each service type (per customer), and profit after expenses.	Operations and Management
Competition	List competitors and their product/service. (ex: GAP analysis comparison)	List marketing strategies, business processes of competitors.	Locations charecterstics of competitors	Document the customer segment catered by competition (eg: GAP analysis). List the executive team, partners and venture funds.	ex: Important events in competition since inception.	Customer pain points addressed by competition and the price charged by competition for it.	Competition Perspective
	Description	Strategy	Location	People (clients/providers)	Schedule	Motivation

BPF process summary

I will follow up with a series of blogs explaining each of the rows, columns, and cells in this ontology. Lets briefly examine some concepts here -

Whats inside a cell - Each cell in this matrix contains one or more artifacts. An artifact is a work product such as a network diagram, a use-case specification, a a catalog (list of things), diagrams, or even matrices. For example, a class diagram describes the organization structure, or a GAP-analysis document is part of competition scope.

Iterative process - Planning a business is an iterative process. As you continue organizing your ideas systematically, you may run into new ideas, plans and dependencies. You will perhaps go back to a cell multiple times till you get it right.

Mistake focussing only on column-1 - Without an organized plan several of us focus only on the product-design and service-delivery planning (which constitutes only 5 cells in column-1). This is mostly true for those in software development and services field. As we can now relate, a business-plan constitutes 25 cells of information gathering and analysis. Focussing only on 5 cells (in column-1) is a recipe for disaster. With more insight (from 20 other cells), your plan is more prabable to succeed.

Contextual Scope (Row1) - This is a contextual/referential representation of the business. Example-For a generic "dating portal" business, the "who" cell (column-4, row-1) will include "single men/women". Similarly the "who" cell for a generic "restaurant" business will include "customers, suppliers, employees and partners".

Next Steps

I will appreciate any feedback to improve this framework. If you want to work with me on this task, please email me at sanjeev(at)corners(dot)in.

Apart from completing the blog series I intend to do the following over a time period -

• Create reference contexts (row1) for some common scenarios such as Restaurant business, dating portal, offshore software development service
• Define in necessary detail, a methodology to fill each of the 30 cells - through example artifacts such as ER diagrams, documents
• Identify open-source tools that can help in creating different artifacts
• Create an open-source project to store reference plans
• If time and resources permit, create an Eclipse based EPF project to automate the steps