The business plan: Mapping your way to success
Some people think of drawing up a business plan only when they are about to meet potential investors. While this is understandable, given the many pressures and decisions involved in launching a new business, this also misses the entire point of setting down a business plan. It’s not about impressing investors – it’s about understanding how your business is put together and how it is designed to achieve its goals. You should be using the plan continuously to monitor progress and hold yourself accountable to the standards you set when you launched your venture.
By putting the business plan down in writing, you are forcing yourself to review all of your core assumptions about your business: the competitive advantage of your business, it’s marketing plan, operations, finances and staffing. By doing so you will spot weak links and interdependencies you otherwise would have missed. For example, you might realize you are lacking staff to service your potential market, or that you will require far more funding to expand your manufacturing or service capabilities to provide a competitive market price for your product. These realizations might lead you to consider new strategies, such as seeking out strategic partners or investors, or targeting distributors rather than end consumers.
A business plan is especially critical for the founder of the company since it is essentially the only way to present yourself with a standard you can use to hold yourself accountable. It is lonely at the top, and the view from the peak might be breathtaking but it is also distracting from looking at where you are right now. A business plan can help to keep you grounded and monitor your progress. It sets down benchmarks against which you can measure actual results – and identify the point and root causes for success and failure.
The plan’s purpose is more than to help you assess your situation in the present- it is the tool with which you map out your path to success in the future. It’s benchmarks and goals are not mere passive predictions and sops for the investors – they are the inducements which keep you oriented on what you seek to achieve, and forces you to consider how to achieve it.
Downplaying the utility of the plan to attract investors aside, that is also an important purpose of the plan. Nothing impresses an investor, or a strategic partner, or even a potential employee more than laying out before him a well thought out business plan. Even if you don’t have time to give him the entire 30-minute power point presentation, having the business plan firmly grounded in your own mind will ensure that even the 30 second elevator pitch is more persuasive.
So what are you waiting for? Get out your notebook and start jotting out the flowchart and tables of organization – you are going to need them!