Friday, September 20, 2013

Why writing a business plan can be so hard -- and why it is so important

    There are people who make their living by scouting for talent, writing a business plan, launching a company, scooping up a generous salary, and then maybe selling their interest for a nice profit. What the company does -- or was intended to do -- isn't as important to them as the money they can make ... by writing a good business plan. They know how to do it.

    But most of us don't. That's why it can be so hard to do when we need to do it -- and, if we are trying to build a business, we DO need to do it.

    Ask yourself, "do I know what a business plan is?" and "why do I resist preparing one?"

    The short and simple -- a business plan defines your goal, focuses your efforts, and makes your success many, many, many times more likely.

    With a business plan you don't ramble. You get up in the morning and go to work -- with a purpose.  There's no wondering what you have to do that day. It's all spelled out for your in your business plan.

    The first obstacle in developing a business plan is the need to set a goal. For the professional business plan writer (not you!) the goal will be formulated to please potential investors, thus it will be focused on achieving magnificent profits. But remember, the true goal of the professional business plan writer is to take a quick profit, then cut and run. You may actually want to develop a business that can grow pleasantly and profitably for years, providing you with both economic security and life satisfaction.

    But how do you put this in words? A good starting place is to write down your dream as your goal. After all, this first business plan is for you, not investors. You can adjust it and fine tune it later, when you begin to gather up the other parts of the plan.

    Those "other" parts of your business plan involve the "how" of "how you are going to do it." Again, putting this down on paper isn't so easy but again there is a practical starting point. Try this --

    Write down in simple words what you think you will have to do to reach your still somewhat vague goal. Now start to refine the "how."

    You refine the "how" by asking yourself questions -- and trying to answer them. Then questioning your own answers and finding out what data is missing. It's the missing data that makes the preparation of a (useful!) business plan so difficult for the non-professional. (The pros know how to wing it but this should be avoided, at all costs, by you.)

    As you get into this you begin to find out lots that you didn't know and, at first, you may be convinced that you can never known. But when you break down the big unknowns into their smaller component unknowns you find that yes, there may be ways to discover these facts. Call it detective work, research, or whatever. But the more you can substitute facts -- knowns -- for vagaries the sharper and more useful your business plan becomes.

    How hard should you work at it? How much money of your own are you planning to invest? How much money do you want to make from your investment?

    Preparing a business plan yourself, for your own business, can be hard work. But without a sound business plan you can work very, very hard for a long time while achieving nothing.




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