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 raise funds or to go on an ego trip.
What else is there? Well, there are all kinds of internal studies, some with great diagrams and a lot of talk. But those are not “business plans.”
No. A “business plan” means money.
Counselors in government offices and on college campuses repeat the “make a business plan” mantra as if it were real. It’s not real. It’s not even being honest. When I advise prospective business owners, I ask two questions:
1. Where are you now?
2. In which direction are you heading?
Those are not always easy to answer. But that’s what you need to know before you build your business.
Starting a business means you need a direction, not a specific goal. Our world is changing so rapidly that the future is a moving target. Being able to adapt to changing conditions and reassess your marketing on an almost daily basis is far more important than saying “I need 100 customers 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, it is necessary to complete the ELEMENTS of a business plan.
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. Calculate how much you are going to take 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 you do not need to write a business plan unless you plan to raise funds. If you’re not planning to fundraise anytime soon, don’t. You are wasting valuable time that you should be spending on your business.
Putting together a business plan is different than 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 have a great business. It is a sales tool. It is built with nods to graphics and layout, as well as information.
A business plan is not complete. it can’t be. It should only be 20-25 pages, and you can’t fit everything in that space. He is selective in his disclosures, those disclosures being basically pro-business. It is a document that tells lenders and investors:
~Why this is a big deal;
~Who is on the team;
~ Why the market is strong;
~ Why the price is right;
and more importantly,
~ How the lender/investor is going to make money.
“Knowing” this for yourself is one thing. Convincing a lender is another matter entirely. And that’s why you write a business plan.
