Business Plans: Not Fill-in-the-Blank
Often, it seems that anyone and everyone doing business plans are filling in blanks or using templates. For many organizations, the creation of a business plan is an exercise that gets put in the drawer or on a shelf to be forgotten until it’s time for the next exercise.
A successful business plan must be a strategic plan and an action plan AND a living document. It should be dynamic, and viewed as the tool that the organization uses to see where they are going and how things are changing as they move forward. The plan includes assumptions, forecasts, and periodic revisions to keep the organization moving forward and thinking forward with new information and revisions of the strategy, etc.
When I speak to students and entrepreneurship/business plan groups (or lead them), I push them to engage in the process more than the actual creation of document. In other words, they need to be focused more on the analytical and strategic thinking skills for developing the insights and plan content and less on writing a document. They need to know how and why they need the strategic vision, the competitive information, the financial forecasts, and then they need to be able to know when, why, etc. they are varying from that plan when running the company. (The document when it is ultimately written needs to be well-written, grammatically and structurally, but that is a given.)
When working with clients to raise funds (e.g., government grants, private equity, bank financing), the business plan becomes a key strategic document. The business plan and its components—which must include sound financial forecasts and the strategic thinking behind developing the plan—are required elements of the process. The business plan is a building block, a foundation for the communication documents that are created to seek any funding. Even when potential investors only want to see a presentation, the information for that presentation should be based on the organization’s business plan.
Who Else Uses the Business Plan?
The business plan is of interest not only to potential investors but also to the auditors for certain groups (such as state tax investment status-qualified business ventures). Auditors use the information contained in the business plan to assess the potential of new entities and to gain an understanding of the “going concern” potential of these organizations. They definitely aren’t looking for routine, fill-in-the-blank analysis.
Templates and Fill-in-the-Blanks Aren’t “Good Enough”
When making a case for someone to make an investment in your company or for an auditor to decide whether your business has positive potential, treating business plan development as a “fill-in-the-blank” or “paint-by-number” process similar to doing homework that’s merely “good enough” to “pass.” To acquire funding or to be a “going concern,” you aren’t just trying to get a grade good enough to pass; you need to be one of the A students. There are hundreds—even thousands—of competitors out there with ideas and businesses who are willing and able to do more than “good enough” when presenting their ideas and business propositions. Effort definitely counts when preparing a business plan; you must put your best ideas and information forward. As the saying goes, “You get one chance to make a good first impression … or a great one.”
Articulate the Idea and Virtually Close the Deal
Have you ever read an article or a book that is so well written that you immediately want to act on the information? As you read the book, each page, each chapter makes you want to read more AND take an action on what you just read. You want to DO something to be a part of the story, to join in the success of what is happening in what you are reading. If your business plan doesn’t have at least some of that punch (keeping in mind that this still is a BUSINESS plan) then you are missing out on an opportunity to hook your reader into YOUR STORY.
Give Them a Story Line and an Adventure
There is an exercise that is frequently recommended when trying to develop creative and unique advertising copy for print ads. Look at your ad and those of some competitors. If you can interchange the name of your company with those of your competitors in the ads, then you aren’t saying anything new, noteworthy, or meaningful to your customer or prospect. The same type of exercise can be applied—with a bit of twist—to business plans: use “find and replace.” Take a business plan from your industry, then find and replace company X’s name with your company’s name. If you are “just like all the others,” go ahead and do a fill-in-the-blank or find-and-replace business plan. Don’t stand out from the crowd and certainly don’t tell a compelling story about your great idea and how your technology, product, and team are different. Be like everyone else; better yet, don’t even bother with a plan. Just show up with a few PowerPoint slides and no answers about the long-term potential, your competitors, current technology, alternatives, financial information on how much you need to get the product developed and to market, or any other crucial information. I suspect you will have a great deal of difficulty acquiring investors or any interest in your business.
The business plan is a sales tool. If you aren’t putting the effort into creating a unique, compelling, and investable story. Then you might as well BE doing a fill-in-the-blank, a find-and-replace, or even a paint by number. If you aren’t unique. If you don’t stand out from the crowd and you can’t be bothered with the effort to tell your story and know who you are competing with – even if you don’t feel like they are much of a competitor. If you don’t want to have to tell your story and convince someone you, your team, and your technology is the best and should be invested in. Don’t. Let your competition do it and get the investors money and get to market ahead of you with more resources and you can run to catch up.
When it’s time to tell the story of your business to potential investors, to the media, to customers, to prospects, to potential employees, and to anyone and everyone who will listen, it’s important to have that story clearly written, not only in your own mind, but on paper. You may not be asked to hand everyone a written business plan, but having a document that clearly explains your business to your audience helps them to understand where you are going and how you intend to get there. They get pulled into the story and want to make it happen with you. With a plan, more things are possible because the goal and the route become clearer.