In talking to entrepreneurs the subject of business plans often comes up. While some have excellent plans, others haven’t and feel that business plans are a complete waste of time and just there to line the pockets of consultants.
I think the issue is that the phrase “business plan” has become over used and lost its meaning, conjuring up complicated and costly documents that have no real practical help. Just another form that has to be filled in.
However if you were to ask whether someone has a plan for their business, not a “business plan”, but simply do they have a plan for their business, then most will say yes of course.
Few would imply that they have no idea of what their business is selling, the market it is in and what its aspirations were, even if it’s not written down but just in their heads.
When communicating to potential Investors or applying for a loan however they will want it written down in order to decide whether it is something they are interested in and to filter all the many approaches they receive.
They can’t see or talk to everyone, they need to look at something to decide if the opportunity is in a suitable market area and has sufficient quality that they will then invest time in following up.
That has lead to the structure that we now call a Business Plan. But if you are not applying for funding is there any point in writing down the plan for your business?
Well yes. Because the discipline of having to write down your thoughts for the business is a great way to force you to put in place actions and ideas that will develop your business.
While it’s all in your head it is easy to be fooled that you have this grand plan. Start writing it down and get some detail into the woolly thoughts that you have.
If it is not for funding but only for you, it can be in any format and as long or short as you wish. An action list that goes beyond a few months is a business plan.
So is planning your business worthless? If applying for funding is it unreasonable for the potential Investor to ask for information about the business and its plans in writing so they can read it?
Writing business plans for business angels