Do you need a Business Plan?

Justin Cooper Added over 5 years ago

Unless you aim to raise capital or borrow from a bank, why should you bother writing a business plan?
Kylon Gustin answers this question with one of his own: "If an investor or lender requires a business plan before they will loan you money, shouldn't you require the same level of due diligence before you invest your own hard-earned money in a new venture?"
He’s got a good point, but how many SME businesses have a business plan? In my experience, not many. Why? Partly because of the day-to-day pressures of being CEO, Sales Director, CFO and Chief Bottle Washer – and partly because the thought of writing a 50 page document is frankly pretty scary.
So what do you do? You could float around between one project/customer and the next– but this isn’t very likely to create a sustainable, scalable and saleable business. I prefer a streamlined approach such as the F Plan diet of all business plans – developed by Seth Godin.
In this blog Seth proposes five sections covering:
Truth, Assertions, Alternatives, People and money.
‘Truth’ covers the state of the market as it is now, ‘Assertions’ looks at how you hope your idea will change things, ‘Alternatives’ describes what will happen if some of your assertions don’t work out, ‘People’ describes the team of staff and partners you’ll need to build, and the ‘Money’ describes what you plan to make and spend.
Nice and simple. Except that I would add a couple of sections: ‘Drivers’ and ‘Problems.’
‘Drivers’ slots in after ‘Truth’ and explains what motivates and inspires the architect of this business to do what they plan to do. It would ask questions like: ‘Apart from making money, why am I so committed to doing this?’ and ‘Why am I the only person who’s qualified (by the way I think and the values I believe in) to do this so well?’ It would also ask ‘What’s the higher purpose behind what’s driving me to do this?’ and ‘How will this improve people’s lives?’
‘Problems’ follows on from this and focuses on what customer problems the business solves. These might be seen or unseen by the customer. Again we go back to the question of ‘higher purpose.’ So my questions would be: ‘What bigger problem am I solving for my customers and how does it enrich their lives? and ‘What options do they currently have, and how will this change as a result of the products and services I offer?’
All of this would probably consist of 4-5 pages of A4. Now that doesn’t sound so scary, does it?

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Posted by Justin Cooper at 3:54 pm 0 Comments

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