Quote: “What are you preparing? You’re always preparing. Just go!” Lord Dark Helmet – Spaceballs
Understandably, those who are starting a business (and even those who have been in business for a while) often hear that they should have a business plan. For many, their inner feelings are probably similar to Dark Helmet. They know what they want to do, have a vision in mind and believe that any time spent on preparing some big book that is going to lay out the details and probably sit on a shelf is a waste of time. In my experience, that reluctance to lay out a plan in writing gets even more pronounced as the business matures.
One of the clients I really enjoyed working with had the famous poster in the back of his desk – you know the one with the two vultures perched on a branch with one saying to the other “patience hell; let’s go out and kill something!” I do believe that many entrepreneurs fall into that “sensor type” from the Myers Briggs test typified by action oriented behavior. Trust me, there’s nothing more important than leading others to get things done but there are dozens of reasons to have a business plan. I would like to focus on just two.
The first is the very simple truth that, for most people, putting in writing helps to clarify an idea or a plan. Even if done in outline form, addressing the 10 or so points that make up a plan helps to make sure that you address all of the principal components. (Author’s note – “click through” the Entrepreneur Power Play Book tab on this blog to “The Rookies, then “Start Up Package” to see our suggested contents.) Even if you limit your plan to a “pitch deck,” I think you will find that it will give you clarity and with clarity comes focus and we all know that successful entrepreneurs must remain focused. The clearer your vision, the better your chance for success.
The second reason centers on communication. While you may certainly have a vision of your business, what you have to get accomplished, how you will approach the market and your competitive advantage, others need to know as well. How do you explain your vision to your key team members and share with them the knowledge and foresight you have regarding where you are and where you’re going? How do you explain succession or how you will exit the business and make sure that those who need to know understand? Perhaps more important, how do you get financing sources like investors or banks to understand your business and to show that you have considered and mitigated potential risks? Without something in writing that they can review and digest, your chance for success diminishes.
In business, there are a few problems that cannot be solved with the right amount of time, money and people. While a business plan may not help you to address a time problem, it can certainly help you to harness the people and the finances you need to achieve your goals.