When I was getting my MBA we did a lot of case study work. And one thing that was found was that not a lot… well actually… the majority of small businesses didn’t have a good business plan, if they had one at all.
It was stressed so much in the studies that I actually thought about beginning a consulting practice to provide small business plan services. Well, there are a lot of those out there. And they use a lot of the same templates. So I didn’t want to jump in that water, considering the sharks were very numerous.
So I thought about it a different way and I asked myself, “Does a small business really need a business plan?”
If they want to bring in outside investors… yes. It is required. No one will give you money if you can give them proof that it is not a waste of it.
But what about if you aren’t looking for money from investors? What about if you are the owner and honestly don’t see the value in or have the time to sit down and write a business plan?
What do you do then? What alternatives do you have?
To answer the question we take a step back and look at what the purpose of a business plan is.
A business plan is really the necessary conversation you need to have in order to start, grow, and succeed in business.
And since business changes… your business plan needs to be flexible.
The plan itself is not as valuable as the process of planning. And, as a small business owner, you do that every day. Often it is as a reaction rather than an action… but that is ok. Over time you want more of what you do to be pro-active; which often means you take the reactions you had in the past and make them a way of doing business going forward.
If you haven’t started your small business yet… I would highly recommend that you take the time to write a business plan. And I would have someone review it. Someone who knows you, but who would tell you if you were barking up the wrong tree. Best way to do that is to come right out and ask them if it would be something they would invest in if they have money to invest. (Don’t ask them for money, but paint the scenario that says, “If it wasn’t me, and you were looking to invest, would you invest in a business like this?”) Doing so will increase your chance of success and it can ground you to reality.
If you currently own a business and are considering making major changes… same holds true, take the time to write the plan.
But I also acknowledge that a small business that is already going, is doing well, and just wants to grow might not need a full business plan as much as it needs a plan of action.
The difference? A plan of action picks one aspect of the business and says, “This is what I am going to do about this.”
In order to have a plan of action you need to understand three things:
Will anyone care if I do this?
Will I make (or keep) money by doing this?
Can I (Do I have the time) to do this?
Those three things will tell you if you should do it. Tackle one plan of action a week, in different areas of your business like: Marketing, Sales, Advertising, Website Design, Production, Employee Problems, etc.. and collect them. Before too long you will have an actionable business plan that can keep you grounded.
It may seem simple… but who really wants it to be hard?