To Business Plan or Not to Business Plan

March 23, 2010 W. R. Eilers 2 Comments

Well, I have lagged behind a bit this weekend, but such is fatherhood.  😉  So, recently I read a forum over on LinkedIn asking what is the most important advice for a start up company.  We’ve all seen or heard the stats that 90% of all start ups fail.  Although these numbers are exaggerated, there definitely is some truth to high levels of businesses failing in the early stages.  However, if we discount the estate planning and wealth management vessels, and we eliminate the half-hearted state filings and whimsical novelties, we get down to the real core of small businesses.  These are the people with genuine good ideas, good recipes, good work ethics, and a very solid basic desire to succeed.  These are the people that we should focus our attentions on, and it is here that we ask the question,
what is the most important advice you can give a startup?  Let’s get rid of the obvious requirements, money and time and proper analysis of what you actually have.  Let’s get rid of a good or decent idea, because without that, you will fail.  (It doesn’t have to be a incredibly unique idea btw).  We can take away hard work because anyone not prepared to work will have issues in a startup or at a regular run of the mill job.  So what do we have left?

I have heard some say “research, research, research”, and I agree to a point.  You must research your market, your target audience, your competition, your funding options etc.  The more you know the more comfortable you will be in your place; the better presentations you provide, and the more realistic your are about your situation.  But research alone is just piles of knowledge.

Many point to a solid financial forecast as the key to success.  A strong financial forecast builds your parameters for supplies, inventory, and employee needs.  It guides funding presentations and marks your offering goals for investors.  However, good financials alone  are just numbers out of context and rarely speak to the soul of your business.

Others point building relationship and marketing.  The greatest ideas in the world can sit dormant with solid financial backing if they can’t reach their intended audience.  A good marketing effort has to be inline with your industry and your product and your intended audience.  Still a great marketing campaign will be short lived if you don’t provide a solid product.  The larger the group the more people you can disappoint.  A bad reputation will always move faster than a good marketing campaign.  If you are not prepared for the success of your brilliant marketing plans, you might find yourself in a bit of a pickle.

So where am I going with this?  Well, as a trees less forest person myself, I find that the startup discussion tends to always focus on the details or at least the search for that one magically element that leads to success.  What you end up with is a list of factors and catch phrases (an example) that can make or break your concept.  The truth is, there is one item, one document that brings it all together, and I would venture to say without it, you are bound to fail.  It is the business plan.  Of course there are exceptions, business created from a hotel room scratch pad.  There are also plenty of companies with a business plan that fail.  So why is the business plan so important?

A good business plan takes all of the elements and makes them work in cohesion.  Solid market research combines with solid financial forecasts, and a good marketing plan.  If each element is drafted in consideration of the other, you will avoid the vacuum analysis of each element as well.  A business plan does not have to be perfect, as long as it understood to be adaptable.  The real point is to bring things together under a common time frame and a common goal orientation.  It shows investors that you have a concept with foresight.  For those VCs and small angels, they have seen every “great concept” under the sun.  What they want to see is a company that works and has anticipated success.  Your business plan can be 100 pages long or it can be 25 pages long (let’s be honest less than 25 pages is just plain lazy), but it has to incorporate your vision, your financial model, your marketing plan, a solid analysis of the market and your industry, and a detailed requirement for startup. (NO GUESSES!!)  It should also include a realistic assessment of your available personnel, your needed personnel and at what stage of build out.  These may seem like simple bits, but you would be surprised how often a business plan is skipped or worse business plan in drafted spitefully.  Remember, a good business plan will help YOU more than it will ever help a bank or an investor decide whether to invest.  If you aren’t sure if you are on the right track, reach out to a professional.  Business consultants like Eilers Law Group, P.A. can provide you with guidance and constructive critique of your business and the plan behind it all.

Best of luck!! 

Uncategorized

2 Comments → “To Business Plan or Not to Business Plan”

  1. Jorge Colon 7 years ago   Reply

    On isolation….

    To interact with people in my local community, I joined and started several service projects, including being on a Board at a local charity. I also attend several art events and book signings each month.

    I also started "dinner clubs" with friends in Orlando, and one recently in Tampa, Florida. We invite executives, public figures and business owners for small dinner events with about 12-14 people. It is a no pitch zone and focused on building mutually supportive relationships (trust) beyond realizing immediate transactions. Simply put: we party together first and work comes later!

    For referrals, that's a more challenging task for me as my client base in mostly in major cities like NY and LA. I tend to become more of a referral resource.

    Jorge

  2. Pennsylvania personal injury lawyer 7 years ago   Reply

    Thank you for all the great posts from last year! I always get great information from your blog. God bless you this 2010.

Leave a Reply