Business Plans – Should you have one?
If you Google the headline above you will mostly likely find articles telling you why you need a business plan. It is pretty hard to find someone who will tell you it’s a waste of time. Yet, so often I come across small and medium-sized businesses that don’t have a business plan yet are successful in the marketplace.
This is the first of a series of blogs where we will look at business planning, so let’s start by considering the question “Do I really need a business plan?”
Before we look at what it depends upon, let’s take a look at what a business plan is. A business plan is a road map, a guide, a blue print for a business. It doesn’t necessarily need to be a long, laborious document. So why is there so much emphasis on having a business plan? I believe it has a lot to do with the old adage that ‘failing to plan is planning to fail’. The truth is we do need to plan; we need to have some basic understanding of the direction our business is going in, what we are offering and to whom we are offering it to. But I am not convinced this needs to be a formal written business plan. It is not unusual to hear entrepreneurs say to just get on with it – “Don’t waste time, get into the marketplace and start flogging your wares, and work it out as you go.”
So what does it depend on?
If you are looking at starting up a business and especially if you are looking to obtain finance, either through seed funding, a bank or grants, then you will need a formal business plan. These avenues of funding require a business plan as part of the process of application. In many cases the plan has to be presented in a specific format, especially if seeking government and institutional grants. But, unless a format is specified I would suggest keeping it simple, succinct and reasonable – it should make sense to the reader as they progress through the document. I suggest that these sorts of documents (strategic plans fall into the same category) are like a walk along the garden path – the document needs to take the reader by the hand and lead them along a reasonable path, pointing things out along the way so that it culminates in a logical conclusion or outcome; a progression rather than something that bounces from one place to another.
On the other hand, if you are a start-up that doesn’t require funding, have a quality idea and researched the marketplace, then that is often all that is needed to get started. In many cases the marketplace will throw obstacles and opportunities your way and you will have the flexibility to adapt as you go. While things rarely go exactly according to plan, the ability to be flexible with execution is paramount.
Many of us in Bartercard are established businesses and may or may not have a formal business plan in place. As a business consultant and coach, I do not believe you need a formal plan in the form of a document. However, I do believe you need know what you want out of your business and also need to devote time and energy into how you are going to achieve this. Most small and medium size business owners rarely find the time and space to consider what they really want or how they will achieve it. They are too busy making it happen on a day-to-day basis – you’ve heard the saying ‘working in the business rather than on the business’. Working on your business is business planning! Working in your business often means simply treading water. How you get to this point will be discussed in the next article of this series of blogs about business planning.
Author: Written by Gary Jaffer on March 25, 2015
Gary coaches, mentors and provides business counsel to individuals and businesses throughout Australia. He is an accomplished facilitator and engaging speaker.