Wishing you Happy Holidays and best wishes for a prosperous New Year, especially to you who are business owners. “Are Business Plans really Necessary?” was an article I published before, but considering the coning new year, I thought it very fitting to bring up this extremely important (and often seemingly scary) subject up again. So without further delay, here is a rewrite and expansion of my previous article for your review and benefit!
“Are Business Plans really Necessary?”
“That was a question asked recently on one of the group on Linked-In that I am part of. I felt compelled to answer the asker, as I certainly understand the question and moreover I understand the confusion and great discomfort with trying to do/write a business plan. However, as I said, I was compelled to answer her question, so here is a copy of my response, as I hope it will be informative and helpful for you too!”
Sorry, but after founding and/or taking over and building multiple businesses, plus years of consulting and professional advisement to hundreds of business owners from start up to Fortune 1000 companies, I have found that, without question, a business plan is not only a good idea, it is absolutely necessary if you hope to ever really build anything lasting.
I’m going to be a little windy here, but hope this will help a lot of you and save many more! Admittedly, to get off the ground and work out of your hip pocket, so to speak, for a very small or one person business, initially doing a plan may be too cumbersome and you actually can get away with not doing it. Problem is, don’t assume you have beaten it, as I assure you that what you don’t know WILL eventually kill you. Bluntly, to get started takes no brains or plans at all (and too often is true for all of us). Truth is though, to go anywhere and last and grow to your potential continually (because business doesn’t have end, except a bad one), you have to plan it! Sorry, but reality is hell. I know, I hated the idea too, and even now the thought of doing a plan is worrying. But that doesn’t change the fact it is required and you or me not likening that doesn’t change the truth of it one bit. So let me give you a little insight if I may.
A business plan is two things (in front of far more). It is a place to make all your mistakes on paper where you can see them an correct them, WITHOUT those mistakes costing you real money, or worse, the total ruin of your business (and you); just in case you didn’t think this was important! Next, a business plan is a process for you to work out a clear map of where you are going AND WHY! Proving it with numbers and considering the many options, problems, costs and market potentials (and pitfalls) you could and may well face. The plan then is a way for you to thoughtfully chart your way through that minefield to your best outcome. To think through in advance what you might do and what could go wrong and could go right. You can and should bring in any of you trusted advisers and all your lead employees at a minimum, so they can all contribute, and more importantly so they can all buy into the plan! As wel, having thought through your intended business activity, you “suddenly” think of a lot of thjings you might not have without going through the planning process! A lot of those ideas can and often are the difference of making your new venture a success. As well, you can consider negative issues that you may not have initially, before they cost you severely! Is a business plan guaranteed to work? Hell NO, of course not! But it is a lot better than walking blindfolded in front of traffic believing everything will be alright.
One item often noted and requested by small business mostly is assist in developing and writing business plans for bank loans or paying someone to do a plan for you. I do professional business plans and write them as well, and I will NEVER just write a plan for anyone! That is ridiculous as the MOST IMPORTANT thing about doing a business plan is the YOU that is put into it! A business owner will learn massive amounts about your business and its options by the process, as well as be forced to make plans and projections that can be proven in advance. These are all considerations and business “bets” you have to make, not someone with no experience of your firm or knowledge of your aspirations. How could some stranger with no personal stake, let alone heart and soul, in YOUR business really write about it, plan it and ultimately totally commit YOU to a plan you didn’t actually write, or at least develop? No Way!
In closing, business planning is often a scary prospect to business owners and leaders, but I can tell you from long experience, it is ALWAYS an exceptional learning experience for those same people to be remineded why they are in business, how and why it works (or doesn’t) and to also regain and increase the excitement for the new venture for you and all your staff too. Lastly, I know you will learn well from planning that in doing so and continually, your company can be and achieve so much more than you would have considered possible having not done so. I have NEVER been involved in any of my own planing or that for myriad other companies where the process did not substantially open the eyes of the owners/leaders to many more issues and potentials that they had never considered or even thought of had the process not been undertaken. As such I reiterate, the process of doing the actual business planning is the most important business action and decision process you can do in a business, and not doing so assures businesses will never come close to their potential for profit or benefit, except by accident. As one business owner to another, is/was it your intention to bet your financial and business life on luck alone? Of course, not, then continue to work hard and work smart; and working smart is doing the planning necessary to get what and where your want!