Don’t write that business plan!
Stop writing that business plan! You don’t need it. There are only two reasons to go through the fuss of writing a business plan: to obtain financing or to go on an ego trip.
What else is there? Well, there are internal studies of all kinds, some with big diagrams and a lot of verbiage. But those are not “business plans”.
No. A “business plan” means money.
Counselors in government offices and college campuses repeat the mantra of “making a business plan” as if it were real. It’s not real. He’s not even honest. When I counsel potential business owners, I ask two questions:
1. Where are you now?
2. In what direction are you heading?
These are not always easy to answer. But that’s what you need to know before building your business.
Starting a business means you need a direction, not a specific goal. Our world changes so rapidly that the future is a moving target. Being able to adapt to changing conditions and reevaluate your marketing on a practically daily basis is much more important than saying “I need 100 clients a day to be successful.”
Most business owners need to do background work on potential clients, or file a patent, or any number of issues. And, yes, the ELEMENTS of a business plan must be completed.
You need to do some basic research on your market and know – really KNOW – that the market is there.
You need to research your competition and determine why your company is better.
You need to run some pretty good numbers. Find out how much it is going to cost you and make sure you have it.
You really need to stay on top of your niche. There are so many changes in the market every day that no business person can afford to be indifferent.
But if you don’t need to write a business plan unless you plan to get financing. If you don’t plan to get financing soon, don’t. You are wasting valuable time that should be spent on your business.
Developing a business plan is different from having all the information in your head or in your desk drawer. The business plan is a persuasive document designed to convince lenders that you have a great business. It is a sales tool. It’s built with a nod to graphics and design, as well as information.
A business plan is not complete. It cannot be. It must only be between 20 and 25 pages, and you cannot put everything in that space. It is selective in its disclosures, those disclosures being basically in favor of the business. It is a document that tells lenders and investors:
~ Why this is a great deal;
~ Who is on the team;
~ Why the market is strong;
~ Why the price is correct;
and most importantly,
~ How the lender / investor is going to make money.
“Knowing” this for yourself is one thing. Convincing a lender is an entirely different matter. And that is why you write a business plan.