With the economy spiraling downward, now is the worst possible time to neglect business planning. People do it because they lose track of the fundamentals. They also fall prey to the four myths about business plans.
Don’t get caught by any of these lies:
1. It’s a big deal. It’s hard to do.
No it isn’t. The number one biggest lie in business planning is that a business plan isn’t a business plan unless it’s a complex document containing a full list of components – from the executive summary, company description and management team all the way to detailed financial projections and thorough market and industry research.
A business plan doesn’t have to be all of that. A business plan should be only as big as you need to run your business. Only if you need a document called a business plan to show to a banker or investor do you need to make it the full thing. What a vast majority of companies need is business planning – not just a plan, but planning – to run their businesses well.
Planning starts with a plan, but then continues with plan review, tracking and follow-up, which makes it management. And you can have planning without market research or industry analysis, just by focusing on what your strategy is and what the specifics are that you need to do. So what’s a business plan, at its simplest? It’s what you need.
For some, it’s as simple as a sales forecast plus regular plan vs. actual review to track the forecast and follow the implications of the difference between the plan and reality. For others it’s as simple as a list of the most important strategic priorities. For most it’s this list plus an expense budget plus some strategy points you can track, plus clear task assignments and ownership of tasks.
2. You’re not supposed to change it.
Hogwash. The point of having the plan is tracking progress toward goals, noting what went right and what went wrong, and using that difference between the plan and reality to manage better. One of the most important things you do with a business plan is to set your assumptions down in writing so you can see them later. When your assumptions change, your plan might (not necessarily, but possibly) change, too. You don’t change the plan just because you want to; you change it because the world has changed. On the other hand, if you didn’t have a plan to change, you wouldn’t have a way to maintain your direction toward long-term goals even as your immediate assumptions change.
3. Lots of successful businesses didn’t have a plan.
That’s like saying lots of successful athletes didn’t train, or saying that lots of good students didn’t study.
A lot of this myth’s reason for being is because of bad data.
Ask successful entrepreneurs after the fact whether they had a plan and many will say they didn’t because they’re caught in that old myth of the big fat business plan.
But in fact they did prioritise, set goals, track progress, divide the work into tasks and owners, estimate sales and expenses, and manage budgets. Furthermore, ask successful people, after the fact, whether they worked hard in school and most of those who did will say they didn’t. “I didn’t have to study in school because I’m so smart.” Yeah, right. Don’t be dumb about planning. It helps you manage. It reduces uncertainty. It builds tracking toward goals and accountability. Don’t refuse to plan just because you don’t need the big, fat, formal business plan.
4. Business plans are for start-ups.
This is obviously not true. Setting goals, prioritising, tracking progress toward goals, and developing accountability for those goals isn’t just for start-ups. It’s that myth again. Maybe only companies looking for bank loans or investors need the big, fat business plan. But everybody needs planning. Don’t deprive yourself of useful tools and methods. Develop your business plan and make that the first step toward planning, which then becomes management.
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Business Plans for Dummies. Watch the Video Here
Questions To Consider While Testing The Success Rate Of Your Business Plan
Here are four ways to test your plan’s success rate or you may instead take these as questions to validate your business idea’s credibility.
So you’re finally ready to craft your business ideas out of your head and wondering if the plans you have made are worth hitting the success road or not. Well, this is something that stands as a matter of concern for every budding entrepreneur. Also, checking the viability of your business plan is necessary. For this reason, the online evaluations are turning out to be handy.
Creating tests online to assess your business plan has become a norm these days. You may find several testing tools with ready-to-use quizzes/tests to help entrepreneurs in interpreting results for developing a successful business plan. So before you take the plunge and give your business a shoot, here are four ways to test your plan’s success rate or you may instead take these as questions to validate your business idea’s credibility.
Answer these 4 Questions to test your business plan’s success:
1. Did you assess your target audience/market?
A crucial element of a successful business plan is making an appropriate market analysis and identifying your target customers.
- Whom are you selling your product/service to?
- What are their demands and requirements?
- How big is the market you shall step in?
- What can you do to launch your business in the market?
An open interaction with your target audience in the form of social media polls, surveys, etc., can help you find answers to the above questions. If your business plan includes all of these necessities, then you have successfully crossed the first milestone.
Related: Business Plan Format Guide
2. Have you made a check of your funding?
What do you need to kick-start your business? Idea, passion, and more importantly ‘MONEY.’ Your business plan should help you identify potential funding sources for your start-up. These sources may include spending your savings, taking loans or sometimes a combination of both. Studies by the University of Oregon say that businesses with a proper plan are more likely to get funded. Therefore, consider making an effective business plan to enhance the chances of getting funds.
3. Did you roll your eyes on the competition in the market?
Analysing your competitors and making a note of their strategies is something that will help you nurture your business. This doesn’t mean that you spend all of your time and energy in eyeing the competition. You need to gather all the tricks implemented by successful entrepreneurs and keep an eye on the factors that lead to failed startups. If your business plan structures key points you take from the competitive market around you, then you have bagged the next milestone in this journey.
4. Have you made a marketing strategy?
Would you like your business to stay stagnated? Obviously not! How you market your product/service to reach your target audience must be included in your business plan. If your business plan gives you a clear picture of when and how you will advertise your product through social media, websites, etc., then you ultimately succeed in creating a full-fledged business plan.
The online test maker software these days has made it extremely convenient to create tests judging the success rate of a business plan. According to a recent study, businesses with an adequately devised plan tend to grow 30% faster. Looking at this number, we can precisely estimate the importance of having a full-proof business plan that includes all of the points as mentioned above. So don’t forget to test your plan before you take the huge leap.
Why Your Business Beliefs Are More Important Than Your Business Plan
Your business plan will change. Your business beliefs should lead you to long-term success.
Do not spend more time working on your business plan than you do actually working on your business. A business plan is important, and you should take the time to make one. Just know that your beliefs about business will have a much greater impact on your success than what you put on paper.
I know this because I’ve coached dozens of entrepreneurs and business owners from the very beginnings of their businesses. I’ve watched some of them grow their businesses all the way to six-, seven- and even eight-figure earnings, even when their initial idea looked shaky on paper.
I’ve watched others struggle for years before giving up, even though their ideas looked foolproof on paper.
The short explanation here is that what you put on paper for a business plan will never match reality. Never. As soon as you start selling to and working with real people, things change. There’s a certain amount of chaos. However, there is a way to harness that chaos and use it to build your empire, which is what I’m here to show you today.
Innovation is moving faster than ever before
In the next five to 10 years, most of the jobs that exist today will be replaced by AI. For entrepreneurs, that means your business operations will be cheaper and more reliable than ever before. However, it also means that your daily operations will look completely different than what they look like today.
Plus, many of these technologies will have unintended consequences. They’re going to create problems that we’ve never had to deal with before (such as high unemployment).
I don’t say any of that to scare you. In fact, I’m extremely optimistic about the future, and you should be, too. My point is that none of us can afford to get stuck on how we do business today.
If your idea of success is to find the next “hack” or “quick fix,” then you’re going to be sorely disappointed. Those hacks and quick fixes are going to become outdated almost as soon as they appear.
So, here’s what you need to do instead: Become obsessed with the principles of wealth and success, not just the delivery system. Study the entrepreneurs and the businesses you admire most and look for the principles that guided their decisions.
Focus on principles, not quick hacks
The most successful entrepreneurs on the planet are the ones that put in decades of hard work to build their empires. That means that they kept their businesses growing even in times of massive uncertainty, loss and change. How?
It comes back to their business beliefs, which is another way of saying principles. If your business beliefs are solid, you will quickly find a way to create new solutions when the old systems for doing business break down. For a great example of this, look at Ray Dalio. He’s been listed as one of the 100 wealthiest people in the world, and he even wrote a book called Principles.
He’s also the founder of the investment firm Bridgewater Associates, which has a fund called the Pure Alpha fund that only lost money three times in the last 20 years. Keep in mind, that includes the 2008 housing crisis, which was the worst economic downturn in recent history. When most people were suffering financial disaster, Dalio and others like him kept their empires growing.
Again, it goes back to beliefs, aka principles. One of Dalio’s core beliefs was that he could design an investment portfolio that would remain safe and keep growing under any economic season. Through years of researching and testing, he created the All Seasons portfolio and accomplished just that. And he accomplished that because he was looking for the principles that would keep his money growing over the long term instead of get-rich-quick tricks and hacks.
Another great example is Google. Google’s mission statement is “Organize the world’s information and make it universally accessible and useful.” That’s not a hack or a get-rich-quick scheme.
That’s a guiding belief in what’s possible. It’s a huge idea that serves the needs of people all over the world. That’s what has allowed Google to create billion-dollar solutions and rewrite how much of the world operates today.
Beliefs can make you mentally strong — or weak
Let’s bring this back down to a personal level. If you believe that you have the creativity, focus and discipline to solve any problem that comes up in your business, then that will come true. On the other hand, if you believe there’s no room left for your ideas, or that you’ll never be able to lead other people toward your vision, that will also come true.
With that in mind, let me offer you a set of beliefs that have helped me succeed in business. These are not beliefs I pulled out of thin air. These are beliefs I’ve seen in action with dozens of other successful entrepreneurs.
I’ve tested them out in my own life and found that they each helped my businesses grow faster. I encourage you to read these aloud to yourself until they become habits in your own thinking.
- Money is attracted to decisiveness, action-taking and speed.
- I can learn whatever new skills I need to succeed and keep my business on the cutting edge.
- I can earn the respect and cooperation of anyone whose help I need.
Now, you might be wondering if I’m preaching some kind of woo-woo, “law of attraction” stuff here. I’m not. If you read those beliefs again carefully, you’ll see that they emphasize taking action. They emphasize going above and beyond what most people are willing to do.
The whole point of this is to prime yourself to want to take these actions even when they are uncomfortable. You will do this because you believe that the rewards will come. No, the rewards will not come immediately. Yes, the reality will be a long and difficult road.
Related: The Power of Dominant Thought
That’s precisely why you need deeply held, empowering beliefs to push you forward even when your plan falls apart. Focus on developing your core beliefs, and you will have the power to overcome any challenge on the path to empire.
This article was originally posted here on Entrepreneur.com.
Top 9 Business Plan Resources
Want to write a business plan but don’t know where to start? Find the top 10 business plan resources here.
A business plan is essential at every stage of your business. By writing a business plan you are giving potential funders a reason to invest in you and you are giving yourself a reference throughout your business journey.
You should be referring to your business plan at regular intervals to make sure that you are still on the right track or to update it in order to grow your business.
Writing a business plan need not be confusing or difficult because of all the available resources on the web. Entrepreneur lists the top nine business plan resources below to help you get started.
Entrepreneur Magazine SA offers advice on every area of writing a business plan
Entrepreneur Magazine being the ultimate “how to” guide for starting and growing a business offers a helping hand to anyone looking to create a business plan.
This section goes into detail on the format to follow and also offers sample plans for you to use as a template. You can also read through articles offering expert advice and do’s and don’t of business plans.
A creative, visual map for success.
The Right Brain Business Plan offers readers a fun and accessible way to creating their business plan and reaching their financial goals.
This book is ideal for the creative entrepreneur, designer, wellness professional, writer or photographer.
With the use of worksheets and step by step instructions, you will find that the business plan process is easier than you thought.
A visual guide to writing a business plan.
Entrepreneur Magazine has an in-depth business plan template that you can easily download and use as a detailed guideline when writing your business plan.
You can download this template for free and start creating the various sections of your business plan so that in the end you have a detailed business concept that is attractive to potential investors.
Practical advice from business plan experts.
BPlans was founded by Tim Berry, a renowned business planning authority, and their website caters to entrepreneurs and business owners who need sample business plans as well as advice for writing a business plan when starting or growing their companies.
This website offers free as well as paid for services for you to choose from depending on your needs.
Complete guide to business plan contents.
There are 10 elements or sections that need to be included in a business plan and this article from Entrepreneur Magazine goes into detail on each.
Related: Free Sample Business Plans
Their format guide will ensure that your business plan covers everything that it needs to for your own use as well as to present to potential financiers.
A useful handbook for building the ideal business model.
Alexander Osterwalder’s has created a guide to building a detailed business model that any start-up will find useful.
You can purchase the full book if your decide that you would like further information on his process and thinking around business models.
Top advice from finance institutions and entrepreneurial experts.
Renowned experts such as Martin Feinstein of Enablis, Allon Raiz of Raizcorp, Keet van Zyl of HBD Venture Capital and Andre Deiderichs of Old Mutual all give their opinions and top tips for writing a business plan by taking into account the do’s and don’t s and what potential investors will be looking out for.
Related: Free Business Plan Template Download
If you are working on a marketing plan for your company, MPlans can assist.
Because writing a marketing plan is just as important as your business plan, it’s important to take the time to understand the various elements.
MPlans offers a range of free marketing plans that you can use as a template to create yours. They also have marketing software that you can purchase if you want to create a totally unique plan.
Tim Berry is the owner of Palo Alto Software, a co-founder of Borland International, and a well known expert in business planning.
Entrepreneur Magazine’s website gives you free access to his articles and advice so that you have all the knowledge you need when writing or modifying your business plan.
Related: 21 Free Sample Business Plans
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