If you’re in business there’s a good chance that at some time or other someone will say you need to write a business plan. You’ll need one to convince a bank, a funder, an owner, or an employer to let you spend some money, or maybe do things a little (or a lot) differently. You might need one to convince a customer that you’re serious.
Whatever the reason, once you start you’ll find there’s a wealth of advice out there on how to go about developing one of these things. Consultants like me are only too keen to help you. We have templates, we have workshops; lots of things to help you through it.
So there’s every reason in the world to get cracking and work up your very own business plan. On you go!
But wait.
Business planning also gets a bad press. People don’t want to read long documents. Things change quickly (especially for start-ups). They take a long time to do properly – time you could spend running the business. So maybe you shouldn’t have a plan after all?
Confusing.
Me? I’m a fan of a plan. If you don’t have one, how do you know what to do in the morning except respond to problems and react to the last big idea you (or someone else) just had, and which will change next week?
I read something the other day which said that you didn’t need a business plan. It went on to say that all you need is a short document that covers something like: the market, the technology, the customers, and your connections; or the problem, the solution, the market, the business. Well, those both sound like business plans to me.
But I get it. You’re not me. Writing a plan might not be right for you.
So to help you out I’ve decided to list out five reasons not to embark on a business plan. We’ll have different reasons each week – I know you’re too busy to read a long documents…
Here’s the first reason:
Reason 1. You know everything you need to know about your business, your customers, and your markets.
So you’re completely in tune with your markets. You know where the money is made (or not) in the business. You understand your costs, your capacity, and your cash flow. You use this knowledge to prioritise customers, products, and resources for the business. What’s more, this knowledge is well communicated and understood across the business. There are no grey areas. No endless debates about what to do next amongst the management team.
Fantastic! Carry on doing what you’re doing. Maybe write a book about how you got this far.
I have to say, though, that in practice many managers and owners lack a basic knowledge of how their businesses work, and what is going on in their markets and customers. Costs not tracked. Product ranges that don’t make money. Customers, consumers, and markets moving in the wrong direction.
Look, a final business plan can be two pages long or 100 pages long. I don’t mind. As long as it’s based on facts and analysis, and it stands up to scrutiny. It’s your call. But remember: those facts, that analysis, that standing up to scrutiny? That comes from a lot of work and thinking. It’s rare that all that information is held in one person’s head.
I can’t tell you how many times someone has said to me “I know what I need to do, I just need to write it down”.
It’s usually only when they start to write it all down, that they realise ideas are incomplete, assumptions are wrong, that a business partner doesn’t agree etc.
The very act of getting thoughts on paper and sharing them with trusted critical friends can transform thinking and galvanise businesses. You should try it.
See you next week for reasons 2 and 3.
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