the secret truth about business plans...

[adrian.ashton]

As an enterprise/business advisor (a graduate of 2 university degrees in business, a member of various professional bodies, and published by peer review on business support), I've had a lot of time to think about business plans.

And there's a lot of stuff about them out there: courses, books, templates, on-line tools and programmes, consultants offering to write yours for you...

However, there always seems to be an underlying assumption that whenever you start to talk about trading or doing business that the universe demands you create a business plan, or else yoru venture will automatically fail, you'll be subject to horrible plagues and the world will end... (OK, maybe I exaggerated those last points a bit).

But I have a rather unusual view as a business advisor - you don't always need a business plan.

In fact, I think that there will only ever be 3 reasons why creating a business plan would be a good use of your time (and if you identify with them, they can often help you to focus your thinking and efforts to make the process a lot easier too):

1) Paranoia - you've never created an enterprise before, or run a business, so how do you know you've not forgotten or missed something? Post-mortems on most failed businesses show that they failed because of seomthing that with hindsight could have been picked up sooner and fixed.

2) Time Capsule - at the outset, you've a clear idea as to how this thing will work, what it will generate and how everything fits neatly together. But the world is messy and full of surprises - if you're not careful, you end up taking on lots of new things which start to pull you away from your original hopes and aims. As such, you can suddenly find yourself not enjoying what you do, running an enterprise you don't recognise, and generally being unhappy - all of which is avoidable if you have the opportunity for a 'reality check' every so often: compare what's happening with what you thought and hoped would in your plan; if they don't match think carefully about what you might want to do about it to get things back on track.

3) Ambassador - if you are going to ask anyone for any type of money, you'll be asked for a business plan: something that explains with no prior knowledge on the part of the money person, who you are, what you're doing and why/how its going to work.

And because you can't always guarantee that you'll be there to present it in person, it should represent your character in some way too, so get creative with using pictures, language and so on - don't let it be another boring thing someone has to read...

And that's it.

If you don't think that any of the above apply, nor ever will, then spend your time doing something more enjoyable.

But if you think that you do need to do one... well, that's another of my blogs on the easy way to write business plans...

http://thirdsectorexpert.blogspot.co...ess-plans.html

[swc123]

As a fellow business adviser I agree to a certain extent - businesses can certainly run very successfully without even thinking about a Business Plan.

However to my mind the actual process of compiling the Plan is one of the major, often overlooked, positive elements. Perhaps that is the "Time Capsule" element you talk about.

I encourage all clients to have a regular "Time Out" that is solely focused on business planning and more strategic thinking, the form this takes varies greatly depending on business. It is all too easy to get bogged down in day to day operations and take a crucial wrong turn and take your eye of the ball

[Top10Tips]

Cool subject.

I have a Business degree. I advise. I also consult. I write strategy. I plan too. But it comes down to ability to be able to harness resources and execute - AKA action.

or aka ACTION.

There are valid circumstances for a written plan, but it is such a shame when people say, advisors mainly, as a throw away statement, "well have you written a business plan".

In strategy, especially (and change or flux), there is two schools of thought - Planning being one. The other being Emergence. What is more important is the marketplace and understanding it.

The role of a plan in a state of change or flux is displaced by action. Just some of my personal thoughts on business plans.

I hope we get some great planners cover the subject of "the purpose of planning" later in our project.

[matt.chatterley]

I do agree that a 'formalised' business plan isn't always a necessity, however, at the risk of stating the obvious, some sort of plan for the business/venture IS required - which gets a bit tricky terminology wise

To fail to plan is to plan to fail, as the saying goes - we don't have a formal business plan in the traditional sense, but we have several documents and sets of notes which map out what we are aiming to achieve and how we will achieve it - sounds like the same thing, but is a slightly different thing in reality.

Doug's use of "action" and "strategy" comes to mind here and I think this is more how we do things - we don't have a plan, per-se, but we do have aims and strategies. The results of our actions are either aimed at stepping towards these aims, or reacting to / anticipating problems which have or will occur.

As a parting shot - planning can be harmful at times. As hinted above, it can introduce undesirable rigidity into a business and sometimes for small businesses (and I feel this applies equally to charities and other third sector ventures), the ability to change and adapt is a critical survival trait.

[PLS]

I disagree - while I think spending money on some crap some business plan software is rubbish, an idea on what you intend to do and who to do it, and how to get out is useful. More important is cashflow analysis and projections, and start-up costs.

Besides, no-one will lend you money without one.

It takes about an hour to write the "plan", the financials a little longer depending on complexity. It doesn't take much and adds loads of value, especaily for a first timer.

[steven444]

i agreed with u PLS