A business without a plan is like a tourist without a map
Have you ever tried to find your way around a strange city without a map? Sure, you can always ask the locals. But if you don’t speak their language, or they yours, things can get a little confusing.
Why would you treat your life, or your family, or your business, any differently?
Why a business plan sets you apart
Time and time again, enterprises with a business plan outperform those without. Why? A business plan helps clarify your thinking and shows your grasp of:
- Finance. It will establish your credibility and appeal. Even a simple plan demonstrates to a bank or lender that you’ve done your homework and have a good case. It also helps them judge whether your financial foundations are realistic.
- Partnerships or co-ventures. Maybe you need other support, expertise or resources. A well presented plan shows a potential partner or backer that you’re well organised. That means you’ve potentially saved them time, effort and money checking out your idea. And it also means the value of your offer automatically lifts.
- Business knowledge. You can show your understanding of the vital components of the business cycle and how you plan for them—finance, marketing (product, price, place, promotion at a minimum), management, human resources.
- Competitive advantage. Organisations with a plan have a much higher success rate than those without. Even if you’re in a highly competitive sector or industry, a good, regularly updated business plan puts you a giant step ahead of most.
- Commitment. By writing your plan, you’re making a commitment to yourself and giving yourself a memorable blueprint for action that you can revisit and adjust.
- Measurement. ‘If you can’t measure it, you can’t manage it.’ Setting targets gives you milestones and benchmarks. These help you make decisions on growth in good times, and defence if in danger.
Why then do so many organisations ‘fail to plan and so plan to fail?’
The debate still rages on how many new businesses fail, and how soon they fail after launch.
Respected sources like Dun & Bradstreet and INC. magazine estimate 33 percent of all new businesses fail within the first six months. Fifty percent go under in the first two years. And 75 percent don’t make it past three.
Or you could look at more cautious estimates. The United States Small Business Administration (SBA) has an overview on 27.5 million businesses. It published a study in 2005 showing 70 percent of new employer enterprises get through at least the first two years Half survive at least five years, and 33 percent make it to 10 years.
Why do we fail to plan? The four top offenders.
While SBA’s stats may be great news for the survivors, they still point to massive business road-kill. Ask anyone who’s bankrupt or lost their house.
After 25 years advising small to medium enterprises, and studying small to medium enterprise (SME) performance, the four top offenders remain depressingly similar:
- It’s too hard
- I don’t have time
- It’s too expensive
- My plan’s in my head.
Let’s deal with each of these objections in simple language.
It’s too hard
Human nature wants the most from the least. Even when we’re indoctrinated from birth that we must get an education, a good job, and work hard, we still love to cut corners.
When we launch our new business, we don’t want obstacles, we want sales. We don’t want tasks, we want triumph; not questions, but answers. Hurdles like quantifying demand, measuring the market, accurate segmentation, and competitor analysis are difficult. How and where do we find the data?
The truth is, right in front of your eyes. Right now. Online.
Millions of people start out on the same journey. True, many fail. But those who succeed leave some wonderful markers that you can use for FREE.
You don’t need a Harvard MBA to write a simple, effective business plan. Take the guerrilla route and enjoy the advantage of samples and advice from some great FREE resources.
Start with this easy to read and follow guide on why and how to write a business plan:
I don’t have the time
Remember the tale of the woodsman who complained he was so busy chopping timber, he had no time to sharpen his axe? Then there’s a saying in the graphic’s game ‘There’s always time to proof-read the reprint.’ And in carpentry the wisdom is neatly expressed as ‘Measure twice, cut once.’
Time spent thinking, researching and planning will help you to a clearer, more organised vision of your goal. Even if your research shows you your big idea was maybe smaller than you thought, it could save you from a painful waste of time and money.
Instead of potentially launching a ship doomed to sink, you live to fight another day with another, better idea.
It’s too expensive
Not everyone’s confident about preparing their own business plan, especially if it’s your first or you’re new to your own business. Does the thought of having a pricey consultant work his or her way through your plan, from company name and vision to cash flow projections set off screeching dollar alarms in your head.
Don’t panic. You have options.
Depending on how adventurous or cutious you are you can:
- Download a FREE sample plan for your niche and rework it to suit your business. This is a good one. https://www.bplans.com/samples/sba.cfm). This link offers hundreds of examples of simple business plans from airlines and aviation to weddings and wholesale and almost every type of business in between.
- Download a FREE generic template for your sector and fill in the blanks. Here’s one source: https://www.myownbusiness.org/s2/#6) .
Whichever your choose, you’ll quickly grasp the directions and content of a working business plan. You’ll feel less daunted about tackling it yourself, or calling in expert help confident you at least understand the big picture.
My plan’s in my head
Everything changes, including what’s in our heads. We forget things; we change our minds; we panic when things go wrong. If our heads were as reliable as most of us believe they are, think of the irksome tools we could get rid of:
- Calendars and diaries
- Shopping lists
- Road maps
- GPS devices
- Manuals, instructions and drawings
- Computers and software.
What distinguishes us from all other forms of life? Our ability to gather, record, manipulate, replicate and reproduce information in an orderly way.
Your brain may well be captain and coach, but take away the plan and the team behind it, and you’re playing on your own.