Stop writing that business plan! You don’t need it. There are only two reasons to go through the hullabaloo of writing a business plan: To raise financing or to go on an ego trip.
What else is there? Well, there are internal studies of all sorts, some with great diagrams and lots of verbiage. But those aren’t “business plans”.
No. A “business plan” means Money.
Counselors at government offices and college campuses repeat the “do a business plan” mantra like it is real. It’s not real. It’s not even being honest. When I counsel prospective business owners, I ask two questions:
1. Where are you now?
2. What direction are you headed?
Those are not always easy to answer. But that is what you need to know before you build your business.
Beginning a business means that 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 reassess your marketing virtually daily is vastly more important than saying “I need 100 customers a day to be successful.”
Most business owners do need to do background work on potential clients, or registering a patent, or any number of issues. And, yes, the ELEMENTS of a business plan need to be completed.
You do need to do basic research on your market, and know – really KNOW – that the market is there.
You do need to research your competition and pinpoint why your company is better.
You do need to run some pretty good numbers. Figure out how much it is going to take, and make sure you’ve got it.
You really need to keep on top of your market niche. There are so many changes in the marketplace every single day that no business person can afford to get lackadaisical.
But if you don’t need to write a business plan unless you plan on raising financing. If you are not planning on raising financing soon, don’t do it. You are wasting valuable time you should be spending on your business.
Putting together a business plan is different that just 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’ve got a great business. It is a sales tool. It is constructed with a nod to graphics and layout, as well as to information.
A business plan is not comprehensive. It can’t be. It should only be about 20-25 pages, and you just can’t 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 business;
~ Who is on the team;
~ Why the market is strong;
~ Why the pricing is right;
and most importantly,
~ How the lender/investor is going to make money.
“Knowing” this yourself is one thing. Convincing a lender is another issue entirely. And that is why you write a business plan..