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If You’re Not Serious About a Business Plan, You’re Not Serious About Business

Tallat Mahmood,Guest Writer, Entrepreneur, January 4,2016

The debate around the relevance of business plans is one that continues to divide opinion. Although conventional wisdom suggests a business plan has a role to play in determining company success, increasingly, and especially in the startup world, some are shunning it.

However, business plans are an essential component of business success, especially when you consider that many businesses fail. A good business plan is where an entrepreneur interprets results from tests on his or her business idea or business so that they present a strategy that has the best chance of success. This validation is one of the key differences between a powerful business plan and a document that is irrelevant.

If you want your business to succeed, whether it is to attract customers, raise funding, or hire the right team, you need to get serious about implementing a strong business plan.

Why a strong business plan Is still relevant
Beyond the business plan acting as an instrument that banks and investors use to make funding decisions, it also serves a number of other key purposes. Primarily it allows you to think through your business and proposed strategy in a way that talking about it never can. The only real way a business plan can be put together is by testing assumptions and interpreting the results. There is no escaping the fact that the business plan will always remain inaccurate to some degree given you are trying to predict the future. However, the margin of error will be smaller, the higher quality the business plan is. Validation leads to quality.

Who your exact customers are, what they want from your product or service, how much they are willing to pay and what the competition is doing are questions you cannot answer by sitting behind a computer. Face-to-face interactions with potential customers, suppliers and competitors are what will confirm or dispel initial assumptions. Even if your initial assumptions are correct, talking to your customers will inform you immensely, and the value it will bring to your business will be immeasurable.

This is exactly what the founders of Airbnb did to create their home-share platform. The assumptions you test can be fed through the entire business plan, including the financials, to develop a plan that has real context layered in.

Related: 4 Reasons Why a Traditional 40-Page Business Plan Is an Insane Waste of Time

How to get serious about your business plan
To prevent your business plan being full of untested assumptions that render the business plan irrelevant, focusing on validation, as discussed above, is the best way to show intent. Given much of that validation will come from face-to-face meetings, there are a number of tools you will already be familiar with in order to “find” your customers and competitors to validate. Using Twitter search, Facebook and LinkedIn Groups, are a great way to seek out people you want to talk to.

Beyond this, all niches have leading publications focused on serving their community. For example, if your target market was coffee lovers, sites such as Coffee Lovers Mag would be a great place to start to find your audience.

Once you find them, the right questions to ask to get the right information and inform your businessshould focus on understanding what the main pain point is for customers and to identify how you could provide a solution. So listen to what they say and probe further to get to the root cause of their problem. Then develop a solution and iterate with the customer until you get it right. This structures your “market research” to get information in the right way and analyze and interpret in a meaningful manner. This information can then be populated in the qualitative and quantitative parts of your business plan.

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Simply Said, Just Do It!

Simple said, JUST DO IT!

Keep your business plan simple.  My suggestion, is to just state the facts (your thoughts) first and then JUST DO IT!

“Begin with the end in mind”, Stephen Covey.

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A Business Plan Helps Establish Credit

A business plan is useful in establishing credibility for your business, if you need to borrow money from individuals, such as your family, or a bank, or other credit institutions.

The business plan demonstrates that you are a serious business person, who has reviewed all aspects of your business, and established reasonable objective for it.

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Is your business becoming an entirety?

The business plan gives you the opportunity to objectively look at your business in its entirety. It forces you to analyze the market and your competition. It enables you to develop prices based on reliable data and information you have gathered.

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Yes You Can Be Great!

 

“A man can be as great as he wants to be. If you believe in yourself and have the courage, the determination, the dedication, the competitive drive and if you are willing to sacrifice the little things in life and pay the price for the things that are worthwhile, it can be done.” –Vince Lombardi

#projection #write #writing

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11. Use your Business Plan as a tool

The business plan is a  tool which can assist you and others in understanding your business. As a plan, it is a document that changes over time, yet is useful for analyzing your work with the business.

#business #planing #plan

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Establishing Credibility For Your Business

A business plan is useful in establishing credibility for your business, if you need to borrow money from individuals, such as your family, or a bank, or other credit institutions. The business plan demonstrates that you are a serious business person, who has reviewed all aspects of your business, and established reasonable objective for it.

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The Must Do’s Of Any Business

These are the must do for any business and its plans.

You must understand your weaknesses and learn how to overcome or manage them.

The business plan is an instrument that changes over time and must be constantly updated.

To use promotion, advertising and direct selling effectively, you must consider two elements, what are your products or service and how will you deliver the message?

For a statement to be at goal it must be achievable, measurable, and time-oriented.

The Operating Costs are the cost of being in business that must be paid whether or not you sell a single unit.

Operating Expenses is the cost of being in business and must be paid regardless of the level of sales.

Current liabilities are financial obligations you must meet within the next year.

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A grant or proposal is another form of a business plan!

Young businesswoman sitting at workplace and reading paper in office

 

We try not to put total responsibility in writing a business plan for the purpose of raising capital, but also to give the business owner some direction and planning.  It is important to use your business plan for your day-to-day operations.

The preparation of the plan forces the potential entrepreneur to consider each facet of the business and its role in accomplishing the company’s overall strategic goals and objectives.

The business plan should be as concise and understandable as possible, while still covering all key issues, especially if it is to be handed over to an investor.  The final version of the plan should include a title page, a table of contents, an executive summary, company overview, marketing, management, financial information, and capital requirements.

Male and female hands with pens writing something in notebooks

Unless you are approaching a traditional banking institution for a loan, starting a business does not require a fifty-page business plan. If you are making one for only your eyes to view, whether it’s fashioned as an abstract dream board, or written up as a formal document; the important thing is to be clear about your vision and goals. Your business plan is your blueprint for action.
#entrepreneur #smallbusiness #networking

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Defining your products/services.

Products and Services

It is important to write a clear, concise description of the products and services you offer, for yourself as well as for others. The process is helpful in clarifying what you offer; identify the number of products and services offered, and for planning changes in product offerings.

  • How are you going to scale your product/service, if so how?
  • How will you sell your product or what is your channel of distribution?
  • Is a product? Do you need or have you chosen a co-packer?
  • Have you considered licensing your product?

The most important reason for describing your products and services is to help you communicate with your customers, suppliers, ad visors, employees, and provide focus for your business.

If the focus is unclear or too general, people cannot identify what you do, and therefore, do not know when to call you or come to your place of business.

For example, a retail clothing store offering expensive, high – quality dresses and suit, plus bargain-basement plastic shoes, would have a difficult time communicate its different product lines. Potential customers might be confused, not trusting the quality.

If the focus is too narrow, you risk losing business to more full time service businesses. For example, a janitorial service offering only vacuuming and dusting services and no window-washing, floor scrubbing, or waxing services risk losing business to others offering more.