When is the Right Time for a Business Plan?

Choosing a time to write a business plan is challengingOne of the questions I hear frequently is that of timing … when is the right time to devote the time and effort to prepare a more formal business plan? It is an important question, and one that must be considered carefully. If you write too soon, your idea may be completely different than what you ultimately go to market with. If you wait too late, much of the benefits will be foregone. How far along in lifecycle in your future business does it make most sense to more formally document your vision?

To start, there is no one “right” answer. Some will argue that there is no point in writing a plan at all, at least in the beginning, as so many factors are subject change. I am reading an interesting book right now by Clayton Christensen titled “How Will You Measure Your Life?” In it, the author talks about the need for two business strategies – a deliberate and an emergent one. I found this analogy quite good. In order to begin a new venture (or adventure), it is necessary to have an initial direction to follow. The author coins this initial decision as being a “deliberate” strategy. He gives the example of Honda entering the U.S. market with a large bike that will directly compete against Harley Davidson’s products. Soon, however, it became apparent that this strategy wasn’t working, as evidenced by a lack of sales. Meanwhile, a group of employees began using Honda’s smaller bikes off-road, and were having a great time doing so. This “unplanned” activity and market segment became an “emergent” strategy, which ultimately gave Honda a foothold into the lucrative US market for motorcycles.

Using this author’s methodology, a formerly written business plan can be a great tool to validate an initial or deliberate strategy. This effort can give you a way to rationally defend your initial decision to pursue a new product or market expansion. As part of this process, you will either gain a greater comfort level with what you are doing, or not. Regardless, valuable conclusions will result (do I “stay” or do I “go”?)

An emergent strategy, however, might be best viewed as opportunistic, and one that might need further validation prior to making the investment in preparing a full, formal business plan. This approach then lets you be open to new “emergent” opportunities while at the same time realizing that you did pick your deliberate strategy for a reason – you need to give it a fair review and effort to validate that it either works, or that it doesn’t. Writing a business plan on the initial deliberate strategy is a great approach to help validate if this initial idea is indeed worthy of the effort.

Christensen states that about 93% of all startups change their strategic direction at least once before getting it right. So, flexibility and preservation of initial capital are clearly critical for survival. But, an initial direction is still needed before you can begin engagement in your idea.

Two Reasons to Write a Business Plan

The role of writing a business plan is really two-fold. The first is to better clarify the strategic direction you want to purse with your business endeavor. If, for nothing else, the act of writing down your objectives, strategic direction and competitive differentiation forces you to really think about these critical thoughts. You can’t go to market unless you are really comfortable in telling your story. Writing it down in a business plan forces you to review all the points, including those you might be inclined to gloss over for lack of interest.

The second role of writing a business plan is to get funding. An outside bank, business partner or venture capitalist will want to have some sort of documentation explaining in detail what it is you plan to accomplish. After all, it is their money that you will be investing. At this point, a more formal business plan starts to make sense. Note that while an angel investor might prefer to hear your “elevator pitch” and in a few minutes, and then decide whether or not they will fund you, it still is very helpful if you have gone through the exercise of more formally reviewing your target market, competition, product positioning and pricing strategy to better understand how to turn a profit.

Alternatively, if by flushing through your new business idea in greater detail, you discover that there is an inherent flaw in your plan, it is better to have found out earlier versus investing considerable effort, resources and money into an idea that really couldn’t work.

The Right Time

Getting back to the question of timing, as you come up with an initial idea for a new business or product line extension, it probably doesn’t make sense to prepare a business plan. First, you need to do some “gut” checks to see what sort of viability your idea might have. That review process might include talking to industry experts, potential business partners, friends and family. If your business involves the manufacturing of a new product, then it might also make sense to get an idea of what costs are involved and what possible patents might be required in order to avoid potential infringement issues.

Once your initial review is accomplished and you feel comfortable your idea definitely has merit, now is probably a good time to consider writing a plan that captures the salient competitive and marketing requirements to get your idea off the ground. Through that process, you will soon realize whether or not your idea could work, at which time it is highly likely you will need to consider the use of outside funding. As your plan will be virtually complete by that time, having the plan already written will let you continue forward without delay.

 

Gordon Benzie is a marketing communications professional and business plan adviser that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+

Business Plan Writing vs. Advising

business_plan_advisor_or_writerOver the years I have had the opportunity to meet quite a few people eager to start a new business with ambitions to conquer a market, introduce a new product or to just start something new. Once the idea is born, the challenge is to pick the best path through to fruition. There are many decisions to make with regards to how to spend your time, where to focus your budget dollars as well as reviewing ideas with close friends and family. As part of this decision process, the source of capital for launching or expanding the business will inevitably come up. Can I fund this idea myself and retain 100% of control, or, do I need help via a capital investment?

Those that make it through these hurdles with the conclusion that outside funding is required must then face the task of best explaining their new idea in such a way that it can generate excitement without necessarily giving away all of the “secret sauce” of the venture. It is at this point that the topic of writing a business plan will emerge – do I need one now, or, can it wait?

Given the capital markets, it is likely you will need to make a bit of a time investment to achieve success … you will need to speak with many individuals before finally finding the right match of your opportunity with the investment profile of an angel or Series 1 investor. In the interest of efficiency, it is typical to arrive at the conclusion that another “venue” for telling your story is needed. In fact, you probably need a few different formats to best tell your story.

To start, a 30 second elevator pitch is critical. If you can’t tell your idea quickly with enthusiasm, then you venture will likely die. Add to this challenge the fact that everyone is totally overloaded today, being impacted by literally thousands of messages, images and other distractions all the time. Your communication must be crisp, unique and stand out from the crowd.

Those that you “hook” with this elevator pitch will then ask for more information. This is a good thing – you have their attention. So, the next step is what do you do? If you can arrange a future meeting in person, great. A presentation will be needed, at a minimum, to continue your conversation. I would propose that in addition, now would be an excellent time to have a business plan already prepared to send prior to your meeting. Access to a written plan can be well worth the time and investment to prepare, provided it demonstrates your commitment to the project and achieving success with your venture.

The challenge is that you can’t really wait for the next “chance” encounter to then sit down and write the plan. These documents need time and effort to be invested so they sound good, are well thought out and exciting to read. This type of writing doesn’t happen overnight, nor can you really put something together in just a few hours. You want to show that you have thought through this business opportunity quite carefully, and are ready to go once finding the right partner, employees, or other resources necessary to get started.

It is at this decision point when you must ask yourself: “Do I just need a writer to capture my thoughts, which I am completely confident are all correct?” Or, is it more accurate to consider that you have “pretty much” the idea for the plan in your head, but, there are definitely some of the details, competitive pressures and product / service differentiation that could do with some refinement? If the latter is the case, realize you need more than just a business plan writer. You need an advisor, a person who can help you with not only the writing to ensure it is understandable, but that it can withstand the scrutiny of an investor that is putting some of their own money into the venture. This type of reader will have very specific questions that must be answered before they consider proceeding further.

If you come to this point in your new business process, challenge yourself to really assess if you need a person who is skilled with what business models can actually be executed, or, do you want to hire a writer that will simply replicate what you tell him or her. If it is an advisor or modeler you seek, then look to see what marketing experience in planning and execution that they have. After all, the entire discipline of marketing is focused on planning, strategizing and executing the best way to achieve business plan objectives. Once the plan has been carefully thought out, it then becomes the responsibility of sales to actually execute upon it. Of course, this may be one and the same person for a smaller organization, but, the concept still holds true.

 

Gordon Benzie is a marketing communications professional and business model adviser that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+

Thinking Smarter Isn’t a Business Plan

think_smarter_business_strategyBy Gordon Benzie

 

Last week I read an interesting and well written article in the Wall Street Journal on the challenges that Alcatel is facing, titled “Alcatel Chief Is Out as Turnaround Stalls.” As you may recall, about six years ago France’s Alcatel merged with U.S.-based Lucent Technologies (former equipment division of AT&T) to create a telecom-equipment giant. Their ambitions to become a global telcom equipment leader have fallen short. Competition is tough. They compete in many lines of business, while at the same time, their revenues trail the competition, which has precluded their ability to make the necessary investments in research and development. These factors among others have translated into massive losses over the past seven years, and ultimately, CEO Ben Verwaayen’s job.

Alcatel-Lucent’s business strategy was to be an end-to-end supplier serving all telecommunications companies in the world, in virtually every markets. That means being everything to everyone, with a product line that includes everything from the submarine cables that wire together continents to the software that phone companies use to calculate and send out phone bills every month. Wow. That is a “big ass” strategic goal. In fact, I would argue it probably isn’t feasible, at least not within a high technology industry where product innovations are significant and competition is fierce.

Interestingly, when asked what the management team was going to do differently to avoid continued year-over-year losses, one of the “official” responses was “they simply have to be smarter than competitors about where they place their technology bets.” I am sure this statement sounded good in the interview, and certainly no one would argue against it. But, I am not so sure I would feel comfortable with this response if I were a member of their board of directors.

There are a few things wrong with the statement “we’ll just have to be smarter.” First, if that is all it would take, then why didn’t you do it six years ago when the merger was first completed? My next concern is that of execution. How do you lead a company to change its decision-making and business strategy by just “being smarter”? Is there a course you can take to accomplish this goal? If so, sign me up … I could always use with being a bit smarter.

The reality is that you simply can’t expect a group of employees and their managers to “get smarter” so they can make better decisions. You can lead by example as CEO, providing insights as to where new market opportunities might be, as well as to show how to operate more efficiently as an organization. I am with the belief that people are probably already doing the best work they can, or least are making the best decision they know how to … the idea to simply “make smarter decisions” is not likely.

Is it possible to embrace a new strategy and take a different direction? Of course. In fact, that is exactly what is needed. The expression of “you can’t please all the people, all the time” comes into play. Perhaps taking a perspective to consolidate and further refine their business might work better here, as a way to be more effective and focused with both strategy and execution. However, this shift would likely involve closing down divisions, which might be difficult for a French firm where strict labor laws prevent such actions.

Sadly, I suspect that if something isn’t done soon, there will be a far worse situation than just a few divisions shutting down … the entire company may go under, which certainly would be a shame. Should the management team try to make the smartest decisions to avoid shutting down? Of course. Making the smartest decisions you can is always the best course. But maybe a bit more strategy is needed than simply making smarter decisions.

 

Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+

Why do Public Relations?

Why do public relations?By Gordon Benzie

 

For this post, I thought I would challenge what the role of public relations is, with the objective to provide a thoughtful perspective on what value PR plays within an organization.

To start, the objective of public relations or PR is to raise awareness of a company, non-profit group or any other organization. Why does this matter? Well, to start, it is a lot easier to sell products or services if your audience has heard of you. Simply stated, no one wants to buy from a stranger. Public relations overcomes this sales hurdle by creating stories about the organization that will be viewed as interesting, or at least interesting enough to be read about by your target audience.

Note that this methodology must be applied with the sole objective to engage your audience. If other people find out, that is fine. But, you must be careful to not waste limited resources reaching individuals that will never be part of your buyer’s purchase lifecycle. This philosophy must be applied religiously to every opportunity for contributed articles, guest blog posts, speaking engagements and award opportunities.

My Audience Already Knows Me

I have spoken to some business owners who state that their target audience already knows who they are, and they know all about their company’s product or service. If this is the case, why spend the investment to reach out to them again? The reason why this investment makes sense is that it is going to help you to continue to best serving your market segment. Just because a customer has heard of you doesn’t mean they will continue to purchase or renew their existing services with you on a consistent, never-ending basis.

The Risk of Complacency

Imagine this scenario as a theoretical a case study. A new competitor enters your market. What do you think will be the first thing they do to introduce themselves to your customers? Odds are some sort of PR campaign, including announcements, special offers, grand opening day parties, etc. They must make this investment as they are coming into your market as a “disruptor,” which must be announced in order to be effective.

Now let’s say that you haven’t been investing your own PR campaign. Maybe funds have been tight as you have neglected this activity for the past year or so. Maybe your website and social media channels are a bit out of date too, falling into the category of something that could be deferred for a year or two.

Unfortunately, you are now a sitting duck for this new competitor to come in and eat your lunch. Once they begin making noise, you will be caught off guard. Assuming you move quickly and start to invest in getting your PR program back on track, it will still take time. Days, weeks or even months will pass before you are able to first get your routine changed to re-focus on this topic. You will be in “catchup” mode for some time. Every month you are behind is a month where you are at risk of losing customers. Think about it … what is the opportunity cost that someone might come into your market and try to steal market share?

At minimum, it might make sense to at least keep a few programs running, even if funds are tight. This way you still have a “toe” in the water, as a steady “beating of the drum,” to remind the market and your audience of current customers and prospects. This activity states that you are still there, and are actively reaching out to them to continue to help better address their needs with your product or services. Seems like a good investment and an even better business strategy decision that can be easily incorporated into your marketing communications strategy.

 
Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+

Are you Ready for the Mobility Revolution?

By Gordon Benzie

 

A couple weeks ago I saw the latest Top 10 IDC predictions for the IT industry. It is always good idea to seek an “outside in” perspective on your business positioning and marketing message. A prediction that caught my attention was that in 2013 there will no longer be growth in the use of traditional desktop computers and laptops to access the Internet. By 2015, it is expected that more people will surf the net from their “Smart Mobile Devices” instead.

From a marketing communications perspective, this is pretty big news.

To start, one of the most important communications venues is a website. The growth in tablets and smart phones to access the Internet is hardly surprising. A year ago I wrote this post: 5 Ways to Improve Website Usability on a Mobile Device, which pointed to this growing trend, and what to do in preparation. Regardless, the expectation that more than half of all website visitors will be on mobile devices is shocking! No longer is it prudent to just think about formatting and display issues … a complete reevaluation on menu navigation and accessibility should now be considered. Ignore this audience and you will be at risk of losing up to half of all visitors in just two years’ time.

Here is something to consider: do you have flash running on your site? If so, then you might want to set a plan in motion to remove it. Apple mobile devices have a significant market share, and Flash doesn’t work on their systems. And, the new Microsoft Surface tablet doesn’t run flash either.

Here is another thought to consider: Windows 8 is out and on the shelves. In the next 12-18 months a much larger percentage of website viewing activity will be done from this operating system, which will run both desktops, laptops and mobile devices. This OS favors a content structure that moves from left to right instead of from up to down. Translation: you might want to start thinking about how to arrange your website navigation accordingly.

Lastly, take a moment to recognize that touch screens are steadily becoming more prevalent. Apple is the one to “blame” for this transformation, with the launch of their iPhones and iPads. Their popularity demonstrates the benefits of this type of user interface – it is just easier to touch a screen to navigate a user interface or website. This is another design element that should now be considered as part of your website layout. Big buttons will need to be incorporated to activate menu options or to request more information.

My prediction is that 2013 will be a great year for web design firms. If I was running the marketing program at one of them, I would be sure to kick off the year with a special message and marketing communications about the results of the latest IDC study coupled with a free “mobility compatibility” evaluation offer.

There might even be a reasonable business plan that could launch a new company offering this service …

 

Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+.

How Much Skin do You Have in the Game?

I recently completed an engagement with a client interested in starting a new web-based portal to serve the music industry. As part of writing his business plan, the discussion came up on what level of funding was sought, and at what point in the process would it be reasonable to pursue. I thought this was a good question, so am writing this post to talk about the timing component of when to fund a business, as part of your writing the business plan.

Clearly, one of the reasons to write a business plan is that you seek funding. This means you need a document that can clearly and quickly articulate how your plan and business vision can become a actual company generating revenues. (Before you decide to actually start writing your plan, here are 5 questions to ask.)

Here is where we have a bit of a paradox … if you are writing the plan to secure funding, then how much can be expected of you to get the business started to demonstrate viability? My client had a real challenge on his hands, in that he really didn’t have any money to invest in the venture now – his expectation was to find an Angel investor to pay for everything. I challenged this assumption, suggestion that he was going to need to put some of his own “skin” into the game, be it either from pre-negotiating some of the necessary partnership agreements, to finding a web developer that could start programming the portal. I suggested he find someone willing to do the work for experience and future equity, so cash outflow was not necessary required. One way or another, my advice to him was that he was going to need to make some sort of investment to show his commitment and devotion to the business.

As you are writing your business plan, either on your own or with a business plan writer, you too will need to think about how to bridge this important gap. My experience has taught me that few investors are simply going to give you a check to pay for everything, and then wish you well … unless you have had a terrific history and have earned that privilege. For the rest of us, we will need to prove our way forward to demonstrate that we have the wherewithal, perseverance and ingenuity to make something out of nothing, so to speak. This concept is critical as part of your selling that your business plan is worthy of being funded.

The best written plan in the world won’t get you funding if you can’t answer the question of “What skin do you have in the game?” Do time and effort count? Absolutely. But, most likely you will also need to have made some sort of financial investment too if you really want to “close” your investor.  After all, if you are trying to pitch your business plan to an investor and haven’t invested any of your own hard-earned money, how can you reasonably expect an investor to?

 
Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+.

What Role Does Social Media Play in your Marketing Plan?

Like it or not, social media is here to stay. It has changed the way we communicate, the way we shop and the way we share these experiences. Consumers would rather buy from someone they know. Absent this type of referral, a product or service review by an independent third party is deemed as nearly as valuable and certainly more credible that what a company says about itself.

According to a recent McKinsey research survey, “Social technologies as a group have reached critical scale at the organizations represented in our survey. Seventy-two percent of the respondents report that their companies are deploying at least one technology, and more than 40 percent say that social networking and blogs are now in use.” The below charts published in the McKinsey report demonstrate the consistent growth social media has experienced within the business world.

 

There are two ways you can leverage social media as a business tool: As an internal means to improve productivity and efficiency, and as an external means to further engage with your customers.


As an Internal Tool

Social media can be used as a collaborative platform to better share ideas and solve customer issues faster. Here social media is being used as a shared IT application, no different than the use of browsers for web surfing or applications for word processing. As a collaboration tool, it should be centrally managed with a set of agreed upon usage guidelines to encourage appropriate behavior that isn’t offensive and makes good business sense.

 

As an External Tool

Here is where inflated expectations sometimes lead to unrealistic lead generation, branding or awareness assumptions. The likelihood of acquiring a million users that want to use your product after reading your twitter feed is probably unrealistic, unless there is a highly compelling event that can give you the exposure for such traffic volumes. A more likely scenario is one where your customers reference and, ideally, praise your product or service within their existing social media sites and usage patterns.

The critical question to ask consider is “How easy are you to work with?” How difficult is it for one of your customers to extract data from your service and upload it into their social media sites? If it is easy, then social media might indeed have a role in your future growth. Also, what content are you providing? Is this information that will be helpful for them as part of their purchase decision and evaluation? What is of primary importance, however, is that you think about it now, and that you realize that the way we use social media will likely change over time. Today we are in the middle of a communications transformation. This means you have to be ready to make the time, effort and financial investment to stay current and learn with the rest of the other companies.

Just in the same way that every marketing and business plan should have a competitive review and a strong positioning, companies today writing a business plan or marketing plan must now have a Social Media component. Businesses must now recognize that this is not a trend that will quietly go away. Social media is an important communications vehicle that should ideally be used both internally and externally as part of your marketing and communications plan.

 
Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+.

What is the Right Length for a Business Plan?

Anyone who has contemplated writing a business plan must decide upon an appropriate length. If you are a frequent reader of business plans, then you probably complain that they are too long. Alternatively, if you are passionate about your new innovation, technology or process, then you might feel that more detail is needed, to help explain why the investment opportunity is so special. This divergence of opinion often results in ambiguity when determining what the right length should be.

Before I proceed to articulate my opinion on this topic, let’s first consider the following: Most readers of your business plan will never read it in its entirety, regardless the number pages, how well it is written or what neat images are included. If you can embrace and accept this concept, then it will force you to think differently about what length is best … worse case, your choice will only impact a small percentage of total readers!

Following in this theme, I am sure you can now realize that it is absolutely critical your business plan includes an Executive summary.

Regardless of how busy your reader is, most will spend the time to read a single page for a glimpse of the business opportunity. It is for this reason that your Executive summary is the most important page of your entire plan.

Here is where Pareto’s law comes into effect – only 10 to 20% of your plan (the Executive summary) will likely be read by 80-90% of your readers. How well you write that section will determine, to some extent, how much (or if) the rest of the plan will ever be read.

Next, if you follow my logic, the rest of your business plan may only be read by 10-20% of your readers. These folks are now engaged and interested. Your topic has appealed to them in some way, so now you have them “hooked.” They are now willing to make a time investment to learn more. It is this group, therefore, that we must seek greater understanding, to then best determine an appropriate length to satisfy their needs.

My logic follows this path:

  • 2-3 pages on the industry and market challenges
  • 1 page to describe the company and its mission
  • 1-2 pages to describe your product or service
  • 2-3 pages to describe your competition and how you will compete
  • 1-2 pages for a marketing plan
  • 1-2 pages to describe the management team
  • 1-2 pages for the financial projections, in summary; detailed monthly proformas can be included as an appendix

If you add an Executive summary to the above pages, you will have a plan that is anywhere from 10 to 16 pages, plus appendix.

Practice has taught me that the extra effort to add more pages is seldom worth it, nor will it really help you to better sell your idea to an investor. Of course, if your product is highly technical and requires a more thorough product description to really get it, then your plan might need to be longer. That is fine, and may well be the right answer. But, if that is the case, you might simply want to take a different path, and offer a technical guide as a supplement instead. After all, not all of your readers will be highly technical – they will likely get lost with greater technical descriptions. This extra content won’t really help you with your objective to secure funding, or better describe your idea to start building your company or new product.

What do you think? Have you experienced different results? I would be interested to hear from you.

 
Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+.

Creativity is Critical to a Marketing and Business Strategy

I am sure each of you has had at least one conversation about what led to a successful business … or why a particular business failed. What makes some startups work and others fail? Obviously, the answer is multi-faceted, with no single reason. I would propose that of all the contributing factors as to why a business survives, there is no more important skill that the management team’s creativity in defining and modifying their business plan, and how they use creativity to execute upon it.

A sound business plan strategy is to choose to excel at either being the low cost, high service or best product provider. But, once a direction has been chosen, it all then depends upon execution of the plan. And, as we all know, unexpected surprises will occur, sometimes even requiring a new strategic direction, product or market. It is the creativity on how these decisions are evaluated and pursued that separates those companies that survive and thrive versus those that don’t.

Creativity is a difficult characteristic to measure or evaluate. The question of whether or not one is creative is often known but seldom fully understood. Willingness to think “outside of the box” is a reasonable description, pointing to an ability to consider new paths previously not considered.

Creativity actually takes a far larger role in our life’s direction, often without our even really realizing it. For example, two identical individuals may both face the same challenge. The creative person may see a different solution that in actuality leads to a positive outcome. The other person may simply not have the vision to see the better solution, so instead takes a different path that is harmful to their personal or family’s future. The irony is that the person in the latter scenario may never learn of the missed opportunity.

How do you rank in creativity? How do you know what you might not know? Perhaps you should try to test your creativity, to see which person you are most like … the one that say the opportunity, or the one that missed it. Next time you are faced with a challenge or “life decision” that doesn’t seem to be all that great, take a perspective that there is a positive outcome – you may simply not see it yet … keep looking to challenge your creativity to see a new perspective that could actually lead to greater success.

Creativity will help you articulate a business plan better, to then have greater success in getting your plan funded. Those with greater creativity will have better success running their business or pursuing their careers. Without creativity, even the best product, service or pricing can only take you so far.

The good news is that, with practice, creativity is a skill that can be expanded upon. But, it takes effort, it may be uncomfortable, and it may take a little more time. But, the sweet taste of success will make it all worthwhile.

 
Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+.

Why Write a Business Plan?

This is a topic that inevitably comes up once an entrepreneur comes up with a new idea and already has a clear vision of what a company might look like to address this market need. The question is whether it makes sense to actually write a business plan if you already have a good understanding of what to do. If you have a strong understanding of the industry and a great idea for a new business, one might argue there is little benefit to write down what you already know in your head. And, if you plan on being self-funded, there is no investor audience you need to speak to … maybe your time would be better spent focusing on actually starting the business?

These are all important considerations, especially if you are very busy, so would have to incur a cost to hire a business plan writer to accomplish the task.

My response would be that there is a very important benefit you gain when going through the process of writing a business plan – it forces you to think about the critical details, any one of which might cause you considerable pain if left unaddressed. The critical benefit of writing a business plan is that it forces you to think about exactly how you will start your business, how you will position your value and segment your audience in your marketplace in a unique way that actually resonates well. In other words, by putting the words on paper and discussing your ideas with others, you can flush out your concept into an actual plan that can then be executed.

Let me give you an example. Let’s imagine that you want to start a party balloons business that provides decorative balloons for all sorts of events, both big and small. In your mind, you know balloons and the competition. You start in your garage and begin handing out flyers throughout your neighborhood. How do you know you have identified the best market segment to serve? How long have your competitors been in business, and what are their margins? How seasonal is your business? What is your five year profitability plan? Without a formal plan, you might not spend the time to think about these types of questions. And, if you don’t put these types of issues down on paper, how will you know if you are on track to achieve your objectives? These are the sorts of questions that might not readily come to mind unless you actually go through the process of writing a business plan.

And, if your competitor does go through this process and you don’t, then they might be in a better position for long term survival.

Only after taking the time to dig deep into what your business can become do you have any chance of actually growing it into something that can actually achieve and exceed your wildest dreams. Question such as what types of customers might you reasonably expect to draw? And, from an income and expense perspective, how sensitive are your suppliers and cost of goods sold? What happens if costs increase by ten percent? Will this make your profits disappear? If so, wouldn’t you want to know this fact before you started your business?

It is this “digging deep” philosophy that can make the difference between your business undergoing a slow and painful death, or to survive and thrive, based on the careful review you have already performed by holding yourself accountable by putting your plan in writing. It is amazing what commitment can be achieve when the process of simply putting something down in a printed or digital format. There is a sense of obligation once such a document has been prepared, which then becomes your roadmap for success. If you hire a writer to help guide you on this journey, you will hold yourself even more accountable to what is agreed upon in the plan. Funny how when you pay for something, the desire to get value out of it tends to increase dramatically!

Once you have achieved your initial stated objectives, it might then be time to seek outside funding. If you can present a plan that was already prepared from a year or two ago, and can then show that you have been following it (more or less), your story and “street creditability” with an outside investor will increase substantially, perhaps even getting to a point where it becomes the difference between securing initial Angel funding – or not.

If you are serious about starting a new business or expanding an existing business in a new direction, the minimal investment of time, resources and cost to sit down and write a plan on how you plan to proceed will offer you a tremendous return on investment, giving your business an important “jolt” of adrenalin that might make the difference between success and failure.

 
Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+.