The reason bankers and investors ask for business plans is because that is what is expected and that is what the Small Business Administration preaches and Harvard Business School teaches. The SBA basically sends 99% of their clients to banks with the advice that they need to take a business plan and have lots of collateral, a day job, and a willingness to pledge every cent of their net worth (retirement, investments, home, first born) and let everyone see their tax return. Sort of like a proctology exam done in public with a jeering audience. Always fun.

To their credit, investors with an accounting background do know how to read a business plan but bankers and angels (dentists, physicians, lawyers, etc.) are often clueless. The SBA says you need a business plan which is reasonable but then it goes down hill from there. You spend so much time on the plan that you don’t have time to actually start up the business or run the business.

In a perfect world, entrepreneurs should be able to focus on starting and running a business. This is why so many of them buy an off-the-shelf business plan or have a business plan writing service write it for them. Cynical but you have to do what you have to do to keep the hindrances off your back.

This is seperate to the concept of “business planning”. Ever heard the expression “proper planning prevents p**s poor performance”? You must have a plan. A long term plan including mission, vision and financial objectives, a shorter term plan with financial objectives, including execution priorities, key metrics to track progress and timeframes to achieve those priorities. You build a business brick by brick, those bricks must though form a house when put together.

Entrepreneurs who dismiss planning invariably end up needing investor/board/external support to professionalise their businesses and get them on the right track. Therefore why not always have a plan and always adjust that plan should things change. It cannot be smart to “wing it” the whole time with a premise of “we’ll just see what happens and change things if we need to”. If nothing else, you’ll save a lot of heartache and headache by planning outcomes and how to get to them, rather than stumbling upon them by accident.

A business plan is written for that moment in time only. The economy changes, personalities change or do not gel, structuring and systems change according to outside influences and… investors themselves can throw caution to the wind when not really understanding THE BUSINESS the plan is written about!
All they see are figures (and possibility of a quick get out having made a bit extra on the way and just sit and wait for it all to happen.)
Some think there are no other additives to help make that business a success even when blindly stated in the contract
Contracts can, on reflection become a farce and breached on account of THE Business Plan and the one track minds of interested parties.

Business Plans are really theorising. They take up the valuable resource of time producing and within hours, the structural outside influences can make a mockery of any Business Plan and consequentially signed.

On account of the Business Plan being always a vital ingredient, the “in thing” for business, before you sign away your intellectual properties and years of blood sweat and tears is to ask an investor for THEIR Business Plan and what they will be doing for YOU .

Have it in writing. On account of the Business Plan you could be reading all about what you will be handing over to them and then discover they do nothing. And… know nothing! (unless you entered a contract stating they will be sleeping partners of course, and not making glowing promises of a very experienced marketing team as stated!).

A Business Plan can be useful to serve as a guide for the day – because it results for the owner much research in it’s collation and very beneficial. As far as figures are concerned at that time they can be worthless over ensuing weeks due to dependancy on a static state of outside generic “forces” for ever – which is definately unlikely.
Call it a Proposed Business Venture and what you would like to achieve starting with the resources you have, and to a certain extent yes! go along with the flow, but see yourself safe and sound first and foremost.
You cannot stay still because the world will leave you behind. You need to continue going forward modifying your path as you go along. Your Business Plan can change every day.

Accompanying a business plan should be a financial plan – particularly cash flow – business has to understand and manage its cash flow as a priority

Finally – for many – remember profit isn’t cash – you can’t spend profit until it is in your bank

Interesting debate

I did this only in that I need ‘Angel’, investment not so much for cash, but expertise within a field I know little about.
If it is a good idea then the accountant can perhaps gauge a market value to the concept. So perhaps then he can produce a ‘Plan’, to take things forward.

We all then eat cake !