Why Everyone Needs A Business Plan
This past week, I attended a great workshop out in the mid-western US. A little chillier there than the 80 degrees back home in Florida, but well worth the trip. Nonetheless, I was appalled that a speaker during the workshop said he “hated the term ‘business plan’ and that entrepreneurs just needed to get stuff done”.
As I thought about his comments, trying to understand his perspective, I understood where he was coming from with his comment. Too many aspiring entrepreneurs spend too much time trying to analyze everything to death, and not enough people are out there taking action. Point well taken.
Nonetheless, flying around by the seat of your pants is also an extremely poor idea. If you can’t visualize where you’re going to be 1, 3, or 5 years down the road, are you really giving yourself a chance to get there? Do you have clear milestones and a path for achieving them?
The vast majority of the clients we get at Blue Horizon Venture Consulting come to us because they’re looking to raise capital for their businesses, and the general consensus has always been that you can’t get a loan or equity investors (those buying a percentage of your business) without a business plan. And yes, this is a very good reason to write a business plan.
But really, is that the best reason to write one?
The short answer is: no.
Writing a business plan can provide a business owner with the absolute #1 thing they need to achieve success: clarity. With clarity comes focus, and with focus come goals and targets to aim for. And the reality of success in business comes from hitting those targets and making your vision a reality.
OK, that’s great, but HOW does a business plan do this? For starters, it helps you get a grasp on your market – it’s size, the latest trends, and what experts in your industry forecast for the future. Once you know this, then you can position your company’s place within that market – a place where there should be plenty of customers and not a abundance of competition.
Mapping out your financial future is also a part of your business plan, and where most people fall short. Unless you’re an accountant or finance person, you’d be wise to seek some assistance here in creating your financial road-map. Have you thought out all of the potential sources of revenue – the numbers of expected sales and what you’ll charge for each? Have you considered all of the capital expenditures you’ll need to get started? What about all of your ongoing expenses? Who will you need to hire, and when, and how much will you need to pay them? What about benefits, and taxes, and the list of considerations goes on.
Then you can dig into your marketing plan, your operations plan, and how much capital you’ll need to make all of this happen.
The more work you do, the more information you gather, the clearer your vision for the future will become. And if you can clearly see where you’re going, you stand a much better chance of actually getting there, or at least somewhere pretty darn close to it.
Of course the alternative is just to run around “getting stuff done”. And you may well have some success if you take action. But without a solid business plan to guide you towards a goal, who’s to say that “stuff” you’re doing is the “right stuff”?
At Blue Horizon Venture Consulting, we want to help you start 2012 on the right foot, so to speak. That’s why, starting on February 13th, we’re going to be guiding a select group of entrepreneurs to their own business plans with our “Business Plan Blueprint” project. To find out more, please visit www.BlueHorizonVC.com/Business-Plan-Blueprint to see if you qualify for this unique one-time opportunity!