8 Steps to Writing a Useful Internal Business Plan – Bplans

One of the best uses for a business plan is as an internal management tool to help you run your business. Now, that doe

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One of the best uses for a business plan is as an internal management tool to help you run your business. Now, that does not mean you should write a complete business plan that you would traditionally use to pursue funding or introduce it to investors.

Instead, you can stick to a simple internal business plan model that keeps your document lean and easy to communicate.

What is an internal business plan?

An internal business plan keeps your team in tune with your business strategy, sets financial goals and budgets, and helps you track business performance so you can better manage your business. It is a document that can be easily distributed across multiple communication channels, that encourages employee engagement, and that aims to uncover issues and competitive advantages for your business.

To simplify the planning process, I recommend using a Lean Planning method to create an internal business plan. This method focuses on creating simpler, shorter business plans designed to function as internal communication plans.

Lean plans are useful tools for internal business planning because they are shorter, easier to update, and focused on briefly describing your business strategy and financial goals. Think of it as a more robust and comprehensive executive summary that is meant to be consistently analyzed, updated and referenced.

What is the difference between an internal and external business plan?

An internal business plan is a tool built to serve you and make your business easier to manage. It is the most effective business plan for internal analysis and should be the focal point for regular strategy sessions. Internal business plans are also frequently used to quickly explore new business ideas to determine if they are viable.

The audience for an internal business plan is typically your business partners and employees. It is usually not shared outside the close circle of people who are involved in your business on a day-to-day basis. With limited audience and a focus on business strategy and management, internal business plans are typically less formal. They do not include much of what is included in an external business plan.

External business plans, on the other hand, are used to introduce your business to people outside your organization. They are typically part of the fundraising process and are used to communicate your business strategies and your team to lenders and investors. External business plans are also used when buying or selling a business.

Because of the focus on educating outsiders about your business, external business plans usually include more detailed information about the team behind the business, the business history, and milestones achieved. The format is also more formal and typically a little longer than an internal business plan.

What is the internal purpose of a business plan?

Within your business, an internal business plan is used to define your business strategy, define who your ideal customers are, set out a more detailed marketing plan, and set up your revenue goals and spending budgets.

Business planning is often associated with fundraising and start-ups, but there is a lot of value to existing businesses in creating a simple internal business plan:

Define your business strategy

A solid business strategy is the key to a successful business. Defining your strategy also helps you stay focused as you grow. Opportunities always occur and as a business owner you need to know what your strategy is and determine if an opportunity fits your strategy or not.

There are also times when you may want to change your strategy, but it needs to be done thoughtfully. With a defined business strategy, you will have the guidance you need to steer your business in the right direction.

Bring everyone up to speed

Especially as your team grows, it is important that everyone works towards the same goal. It can be easy for different people to have different visions of where your business is headed. These different visions can make your business less efficient as people work towards different goals.

A good internal business plan keeps everyone in line and can encourage more consistent and valuable employee communication. In many ways, it should be the document that helps define your internal communication strategy and even your company culture. After all, if you have a clear vision that you can easily convey, the easier it will be to get involved and grow your business.

Focus on predictions and performance

One of the most important management tools at your disposal is a budget and forecast. An internal business plan should always include a forecast that sets revenue goals for your business, as well as budgets to direct spending. These predictions and budgets need to be reviewed on a regular basis, at least monthly, and refined as you go, based on how your business is performing.

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How to write an internal business plan

Internal business plans are simple and straightforward. Leave out the long paragraphs and long explanations and focus instead on simple bullet points and short sentences. Remember, the plan is for you, so make it a tool that you will use and update regularly. Long documents are rarely updated while simple one-page business plans are easy to maintain and use.

Here’s what to include in your internal business plan:

1. Value proposition

This is a one-sentence summary of your business. What value do you provide and to whom do you provide it? You can use this section to share your mission statement – it’s a reminder to your team about the overall purpose of your business.

2. The problem and your solution

It is often easy to describe the products and services you offer. However, the most important part of this section is to define the problem you are solving for your customers. A strong definition of the problems you help your clients solve will keep you focused as you explore new revenue opportunities.

3. Target market and the competition

As important as defining your customers’ problems is defining who your target customers are. This helps ensure that marketing campaigns are focused and that your team knows who you are trying to reach. You also need to keep an eye on the alternatives that your customers may be considering and why they might choose a competitor over you.

4. Sales channels and marketing activities

Your internal business plan should define how you sell your products and services and what marketing channels you will use to reach your customers. As you expand into new markets, your internal business plan can help you lead that activity.

6. Financial projections

At the very least, you want to predict sales and set spending budgets to lead your team. In addition, cash flow forecasts provide crucial insights into whether and when you should consider raising additional funding or opening a credit line to support business growth.

7. Milestone

Milestones define key goals and objectives for your team. It is not about setting day-to-day tasks, but about setting some key goals for the coming months. You will keep your team focused on the most important goals by setting milestones.

8. Your team

If your team is not growing, you can skip this section for internal business planning. But if an important part of your business strategy is to hire and add key team members, identify your key team growth areas.

Make use of your internal plan

Are you ready to write a business plan? Download our Lean Plan Template to start building your own internal business plan. This framework will help you draw up a simple one-page business plan that will outline your strategy and key milestones.

Build your financial forecasts and budgets from there. Start with a sales forecast and expense budget so you can generate a complete profit and loss statement. Ideally, you should also create a cash flow forecast.

Now is the time to use your plan. Start a regular plan review process with a monthly plan review meeting. Review your strategy and compare your sales forecast and spending budget with your actual results.

During your monthly review, you can adjust your strategy and update your revenue goals to reflect what’s really happening in your business. You can also adjust spending budgets based on actual spending and changing revenue targets. If you find that you need a more robust tool to help with this analysis, you may want to take a look at LivePlan’s reporting and forecasting features.

The key to good internal planning is to keep it lightweight and nimble. A good internal plan is the tool you need to bring together smart strategic management and fiscal responsibility so you can grow your business.

Avatar Noah Parsons


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