You need a REAL business plan. Not just one for banks and investors.
For many entrepreneurs, business planning seems like a chore, or even a burden. There’s a popular argument that writing a business plan is a waste of time. Sometimes I hear people tell me a “one page” business plan, or a preliminary plan is enough.
I’m actually quite amazed when I hear these types of comments. Any serious investor would expect to see that you have actually designed your business around a solid, clear concept. They would want to see that you’ve carefully studied your industry and market. And they would want to know what separates your business from all others in your industry and market – why your business will succeed and deliver what buyers need.
If you were the investor, you would expect to do the same thing. The idea-focused entrepreneur is set up for failure. Everyone has ideas. Few people actually take the time to devise clear and actionable plans.
Can you imagine a soccer club asking for money from investors so it could invest in better players – without having a long-term plan? Of course, this does happen. But you can be sure that the teams that win championships have studied their rosters, know their strengths and weaknesses and have designed their teams to fortify their strengths and address their weaknesses. They consistently analyze every other team to study the strengths and weaknesses of the team and each individual player. No, they don’t always win. It’s not necessary that they do. They just need to win enough. Those losses are learning opportunities, and sometimes losing lets you see things winning won’t. Each season, each match, each opponent, each player – are studied long and hard as the team develops and refines its strategy.
You can expect no less in business if you want to succeed. At the end of the day, you got in (or are getting in) to this business because you want to achieve some personal result. You can be sure that banks and investors carefully study what they want as well. A carefully designed business plan, based on solid market research, and focused on actionable tasks towards achieving specific objectives, is far more interesting to your stakeholders than one devised simply to attach to your loan application.
You can read about this in detail in our Business Plan Basics article.
Why do you REALLY need a business plan?