It is a complete pain in the bottom to write and maintain a business plan particularly when at least 90% the recipients never read it anyway – but boring or not it is an essential part of the DNA of your business. Nothing better describes the potential un-investable state of your business than responding to an interested party’s request for your BP with a glib “we’ll get it to you as soon as its updated” or better still “we’ve been just too busy to write one”. The current start-up/early stage market is currently awash with thrusting entrepreneurs who may very well have the next Facebook/cure to Alzheimer’s/answer to world hunger tucked away in their trendy incubator where their ideas and plans are regularly rehashed as the midnight oil is incinerated. But when asked for a look at their plan they go all coy and stumble through a host of unacceptable burblings. When a potential investor or the gate-keeper to a network of investors asks you for your business plan there is often a very good reason why. If you can’t be bothered to create one you will probably have lost them forever. Who is going to buy equity or loan your business cash if you can’t be bothered to write a plan.
So what’s the big deal in creating one – is it really such an agonising process? Why go through that gruelling process of writing a business plan when it’s your business anyway. My advice is that it is the first thing any aspiring business owner should do. After all it is only a written description of your business’s future, a document that tells what you plan to do and how you plan to do it. If you jot down a paragraph on the back of an envelope describing your business strategy, you’ve written a plan, or at least started it.
There are plenty of reasons aside from getting investor-ready for you to do a proper plan
1. It makes you look at the bigger picture – the wider issues that might soon affect your viability
2. It lets you connect the dots – how your product connects to the market, to the competition, to your financials.
3. It forces you to write things down and think things through before going off like an unguided firework
4. It helps you set some goals: Where do you want your business to be a year from now? Three to five years from now?
5. It sets your focus on what you should do and should not do, what products and services you should offer, what types of market you should go after.
6. It gives you insights as it will force you to do a lot of research.
7. It informs you whether your business idea is viable or not.
8. It defines your purpose, competition, management, financial goals, etc.
With all its benefits, why are people not really keen in writing their business plans? Simple. It’s not easy. It requires significant time, knowledge, patience and discipline. You will have to write, revise, rewrite and repeat the process. In some cases, you will have to scrap your initial idea, rethink and come up with a more viable one.
Finally when you have gone to all that trouble ask someone who knows about BPs to review it for you – don’t be shy. But first and foremost just flipping do it because if you don’t think your business is worth the time and effort nobody else will either.
Good hunting – the Venture Pilot