When you write a formal business plan, your focus is on explaining clearly to others what you are trying to achieve and why they should invest in your business. It is an excellent tool for presenting your business idea to funding institutions and government agencies.
It is also advantageous to have a less formal document to adjust to changing conditions while managing your business. For our purpose, we will call that document the Informal Business Plan.
Think of your Informal Business Plan as a working document that evolves as you learn new things about running your business.
The informal business plan often covers the same topics as those found in the Formal Business Plan, but it is not cast in stone, it adapts as you go. In some cases, traditional business planning can be replaced with more agile methods. For more info on agile planning methods, read our blog article.
The Informal Business Plan can also be used to document what options you have, evaluate them, record decisions, identify grey areas, establish priorities, identify risks, track assumptions, and note ideas. The Informal Business Plan is a private document. It is a tool to help you think and write down your thoughts. How much time you spend on it is up to you and what value it brings to your business.
Some prefer to use a lean planning method and have a one-page business plan. To learn more about lean approaches t business planning, click on the link below.