by Fred Roed on 08/06/09 at 1:52 pm
Small business owners, starter-uppers, entrepreneurial venturers and other mad-scientist-types the world over will understand this question: “Is writing a business plan even worth it?”
When starting World Wide Creative, as well as Art Revision, Heavy Chef and BugZapper, I know we didn’t bother. I’m not sure my Ideate colleagues over at Yuppiechef did either. So, did it make a difference? Would we have achieved success any quicker if we had written the 40 page document so keenly advised by Bank Managers, Business Consultants and Accountants the world over?
The other day a funny thing happened. I was invited to a free lunch* by a team of young, starry-eyed entrepreneurs. They wanted advice on how to make their world-domination idea a huge success. I felt a little uncomfortable with the admiration and adoration handed out by my acolytes… but then I got over it. So, after pizza and a few beers, I found myself saying something decidedly un-Heavy Chef – “Guys,” I said sagely, “you need to write a business plan!”
Wham – ! There you have it. A business plan. I actually said the words. And, mind you, without a hint of irony, or even a nervous glance at the clouds gathering above ready to lightning strike the hypocrisy out of me.
Afterwards, I almost choked and phoned them up: “Nooo! Don’t listen to me! Just read Screw it! Let’s Do it! and get on with it!”
And then, I settled down and reflected on the reasons why writing a business plan may not be such a bad idea. After all, developing a business plan is central to many business school curriculums – this you will get wether you get a business administration degree from DeVry, UNISA or our very own UCT GSB. So, here’s a list of my thoughts, which I will kindly share with you (since Ideate is that kind of blog):
1. A business plan is the first step to the ‘Company Manual’ written about by Michael Gerber in his seminal book E-Myth Revisited (a good read, by the way, for those of you wanting to do business right)
2. A business plan should include costs and revenue forecast, which will make you understand how much money you can really make out of the thing. It’s important that you’re honest here. Or, if you’re trying to gain investment, exaggerate as much as possible.
3. A business plan is critical to get investment (see point 2). So many business ideas nowadays require seed capital investment – and believe me, there ARE investors out there. You just need to look… and have a business plan.
4. A business plan should also include a marketing plan. This must also make you think about how you will generate sales – especially in the beginning – and build your brand.
5. A business plan must make you define your brand correctly. “What?” I hear you say. “Aren’t brands only for big companies?” “Nope” is my slow, patient reply. “A ‘brand’ is merely the message you choose to convey. This message must contain a promise… and it should be a promise you can actually keep.”
6, A business plan should include a plan for expansion. Who are your suppliers? How many staff will you need? What agreements and contracts are in place? And how secure (read “watertight”) are those documents?
7 A business plan, finally and most importantly, should state, unequivocally, how your business differentiates. It is important to ‘think like an investor’ in this case. Ensure that you’re being realistic here – ask yourself ‘Would I buy from this company? Would I INVEST in this company? What is SPECIAL about this company?’
And there you have it.
A 7 step blueprint for creating the perfect business plan, posted by someone who’s never actually written one.
Ah, the beauty of blogging.
*There really is no such thing, by the way.
Fred Roed is the marketing guy in the Ideate crew. Fred is the CEO of web marketing company World Wide Creative and the co-founder of online learning portal Heavy Chef. Fred loves writing about people out there doing marketing right. Follow Fred on Twitter here. View more articles by Fred Roed.