Luckily, drafting a plan doesn’t need to be as arduous as some entrepreneurs might think, Rebecca Frabizio, director of entrepreneurial programs at Family Farmed and the Good Food Accelerator told FoodNavigator-USA at the Good Food Festival in Chicago in late March. Rather, she explained, at the most basic level it really only needs three key elements: a financial plan, a basic understanding of the competitive landscape, and a clear definition of the company’s values, vision and mission.
“The business plan is not sexy anymore, and nobody wants to do it,” but “at the Good Food Accelerator we strongly believe in a written, formal business plan,” Frabizio said.
While she acknowledges that the days of the “100 page, crazy plan” are gone, she says the Good Food Accelerator teaches entrepreneurs about five components of a well-structured business, including entrepreneurial finance, leadership, operations and manufacturing, go-to-market strategy and funding.
“Out of those five, I would say there is probably three areas that entrepreneurs, if you are going to work on a business plan, or even scratch a business plan, there are still three areas you should definitely focus on,” she said.
“Number one would be funding. Understanding your unit economics and what it costs to produce your product. I can’t stress that enough. There is no way you can project for the future, there is no way you can actually project for profit, if you don’t know the real cost of what it takes to make your products. So, I always recommend that people wrap their head around, at the very least, their unit economics,” she said.
The second key item is understanding the company’s position in the broader market, Frabizio said.
“I think it is really difficult for entrepreneurs, especially at the early stage, to separate themselves from their product and start to look at themselves as a business. It is understanding your differentiator and who your customer is,” and that can be a lot to understand if an entrepreneur still thinks of the product or concept as “their baby,” she explained.
The final element is understanding the company’s mission, vision and values and how success for the company is defined, Frabizio said.
She explains that many entrepreneurs may understand their values internally, but “putting that into words and on paper really helps lay out a roadmap for goals,” which don’t have to be set in stone but without which companies can easily become lost in the day-to-day grind and end up not going anywhere.
With that in mind, Frabizio stresses, a business plan is a living, breathing document that can evolve and grow with the company.
Indeed, she says at the Good Food Accelerator mentors and leaders from the accelerator work closely with fellows to fine tune their business plans so that companies are able to meet all their deliverables and succeed both short- and long-term.