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.
