11 From the Field: Writing a Business Plan & Budget
11 From the Field: Writing a Business Plan & Budget
John Dille
Build a Business Plan & Budget
“A goal without a plan is a wish-”–old management adage
If the value proposition is the compass, the business plan is the roadmap, and the budget and the metrics used are the waypoints that guide the promised goals home.
What’s in a Business Plan?
There is no one specific template every investor expects when they ask for a business plan. But usually, a business plan will include some combination of the following:
- What you want from investors (aka your “ask”)
- A clear summary of the business, its product and the market you will serve (key activities, value propositions and customer segments from the Business Model Canvas)
- Financial information about the business—pricing, revenue, P&L, cash flow, return on investment, and pro forma (three-year) budget (cost structure and revenue streams from the BMC)
- Background about your company, its history and legal status, and the team
- A bit on your “secret sauce” that will enable you to be competitive (key resources, channels, customer relationships, key partnerships from the BMC)
- The metrics by which you’ll measure success
- Whether and why the business is worth doing or investing in financially
Today’s media marketplace is an on-demand, platform-specific landscape with a myriad of options available to consumers. Anyone in the media business these days knows the chaos that surrounds it and the search for new and more creative methods to monetize its content. Planners must be responsive to these historically disruptive conditions. Whatever plan you start out with, you’ll probably iterate and maybe even pivot to respond to user and customer needs and changes in the marketplace.
That said, having a flexible business plan remains central to the success of any project.
What follows is a look at the essential financial components of a basic business plan.
Developing a Pro Forma Budget
Assuming we have the other parts of the business plan in place, it is the budget process that can give the business plan the credibility and durability that both operators and investors seek.
The pro forma budget for new content or product is usually on a three-year schedule. From start to some level of market acceptance or rejection, three years provides a reasonable look. It is the last step in making the plan real. It is the quantification of the strategies and tactics included in the plan. Inasmuch it must ask, indeed force, the questions that engage the issues facing the enterprise.
The budget employs metrics that must be selected to accurately evaluate performance as well as offer tools that can guide actions that result in meeting desired goals.
Media lives at the convergence of the organization’s ability to create compelling and relevant content and its skill at converting it to money. The organization must do this in a digitally created on-demand landscape and in a marketplace whose players are moving at an uneven pace.
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