My topics are often the result of recent experiences with clients. This is no exception. I am currently in the midst of writing Business Plans for three of my clients. And I’ve got two more that I will probably be starting soon.
In all cases, we started with the business owner desiring to write the Business Plan. After all, no one knows their business like the owner. Plus, it would minimize my hours. So I provided each owner with my outline of what a Business Plan should include:
Executive Summary (write last)
Market Analysis
Company Description
Organization and Management
Marketing and Sales Strategy
Service or Product Lines
Funding Request (if any)
Risk Mitigation
Financials—Historical and Forecasted
The real heart of a Business Plan is the Market Analysis and how the company will address the opportunity they see in the market. This needs to include the company’s value proposition.
Here is what has happened. In all cases, the business owners had a terrible time and couldn’t even get a good start on writing their Business Plans. Which got me to thinking, why is this so hard? Why is it so hard for anyone to write a Business Plan? I think there are a lot of good reasons.
The Thought Process
When writing a Business Plan, usually we’re trying to grow the business, often substantially. This may mean new products or services, geographic expansion, acquisition or all of the above. This alone is hard to figure out.
But add to that the fact that the business will change with this growth in fundamental ways. The owner’s job will change from being a doer/manager to being a manager/business developer/leader/supervisor. More employees will be needed and some of them will be managers with their own direct reports. The systems of the business, especially the IT infrastructure, will need to be developed to support the growth. Business processes must be developed to maintain quality and consistency. The current organization chart, if there is one, needs to be imagined for a much bigger company. And every slot on the new organization chart needs to be filled in the future. And every future employee’s characteristics need to be imagined and planned for.
In short, the planning task is difficult. Serious, uninterrupted thought must be devoted to the task.
Uninterrupted Time
To devote oneself to this deep thinking and planning, the person writing the Business Plan needs large blocks of uninterrupted time. How often does a business owner have large blocks or uninterrupted time? In the best cases, rarely. In most cases, never.
Business owners are busy supervising staff, making sales, reacting to emergencies and all the rest that comes with running a small to medium-sized business. It is often said that “the urgent drives out the important.” Writing the Business Plan is important but not urgent. But what a business owner deals with every day is often urgent and important.
Perspective
Chances are the business owner has never grown a business before, so this is the first time. Plus, they lack perspective. That is, they are too close to the business to objectively work “on the business” rather than “work in the business.”
It is much like writing or creating an Excel spreadsheet. In both cases, the creator needs someone else to proofread their work. The creator is too close to the work product to review it. In other words, one can never review their own work, at least not very well.
I think it is the same with a Business Plan. The business owner will have many or most of the key ideas about what will be done with the business. But writing the Plan itself is difficult. I find it works better to have the business owner download their thoughts, I ask a bunch of questions, and then I write up the Plan. This Plan is then subject to numerous revisions before being finalized.
Final Thoughts
There are probably other reasons why writing a Business Plan is so difficult for a business owner. We need to keep in mind how important this is. I don’t want to write Business Plans that sit on a shelf. I also don’t write a Plan intended for a lender. I want to write a Business Plan that is going to be executed on by the business owner and their team to achieve their aspirations. The Business Plan should be the template that leads to success.
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