The term’ business plan’ is a negative trigger word for me. For example, I was in a client meeting with an IP attorney, and the lawyer kept saying he needed to see a business plan. What he was really saying was: “Give me the 20-30 page document that answers all the questions in a typical business plan.” But it’s a cookbook approach to business thinking that will never be used by the people who created it when it’s completed.

I don’t believe in business plan morality. That is, a business plan isn’t bad. A business plan isn’t good. Instead, I view business plans as extremely limiting. CEOs are typically required to complete business plans as a forced exercise by banks before they lend money, or by angel investors before they invest in a business.

In those cases, creating the business plan is akin to writing a college term paper, where procrastination sets in. The result is C-grade material, which is good enough for the passing grade but will never be reread. Check that task off the list, and then move on.

While I may be approaching the business plan with a negative attitude, I like the thinking baked into many business plan templates. For example:

How big is the market?
How will that market be attacked?
What is the validation that this product can make a difference (or why will it be purchased?
What is the cost structure, along with the overall infrastructure, to create this product or service?
What does the revenue model look like, along with any ancillary revenue streams?

Rand Heer is the greatest financial modeler I’ve ever met. He’s not only the dean of financial modeling, but he’s also the father of driver-based modeling from a software approach. Rand used the term continuous business planning for one of the software products he created. He was on to something. Business planning is a verb, and it’s ongoing and never static.

Thank you, Rand. In my firm opinion, smarter business plan thinking should be simple, straightforward, practical, and impactful. If that’s true, what should the tool or document look like? That’s what we’ll explore in the rest of this article.