Planning is important but the result has the prior importance. The one who delivers the results is entrepreneur. Entrepreneurs like you can change the world. So why is business plan writing so much important? Why are there thousands of books with title like how to write a business plan? Why do most leading business schools offer courses in which teams of students write business plans for hypothetical or real new ventures? Why are there software packages to automate the business planning process?
Unfortunately, the vast majority of business plans are unsuccessful in raising any money. Most of the ventures which are not successful in financing will fail. What’s wrong with this image? Three major things are wrong here
- First, most business plans are written for opportunities that are fundamentally faulty. Writing a business plan for a hopeless opportunity is a waste of entrepreneurial time and talent. Instead, put your opportunity through a precise new business road test.
- Second, as the main purpose of the business plan is often to raise money and because of its intrinsically persuasive nature most of the proponent entrepreneurs mistakenly insist on showing that ‘everything about my opportunity is wonderful’. The reality is that the chance – at least for attractive opportunities – is that everything is not wonderful but there are one or two things that are quite wonderful that override those that are not. What to do before you write your business plan. The promising entrepreneur who prepares an ‘everything is wonderful’ business plan –risks their credibility with investors, who know the real risks that entrepreneurial risk-takers require. This lack of sophistication makes it harder to raise the money that’s needed. Worse, such a positive viewpoint of risks closes the entrepreneur eyes to the very real risks that may lie in one or more of the whole domains
- Third, most business plans are focused on the entrepreneur, their idea and why the idea is brilliant. They are funder-focused rather than customer-focused. Customers do matter but at the beginning, you and your idea are not really important for the investors. What investors care about is solving notable customer problems or needs that offer significant profit and growth potential. If you have a solution to such a problem, then their attention will be grabbed. If you’ve shown that you can deliver results in solving this kind of problem, then you’ll have their undivided attention.Thus, the importance of people lies in the context in which they operate. Set the context first. Let the people story – of you and your entrepreneurial team – close your sale. So what should you do before you write your business plan?
1) Come up with an idea that you think might fly, one that solves genuine customer problems or needs.
2) Evaluate and shape it, using the lessons you have learned about different business domains and what an amazing business plan should contain.
3) Write a customer-driven feasibility study – a memo to yourself that shapes the conclusions you’ve reached from your data and analysis.
Would you like to start your journey to a successful business with a professional business plan? Start here