38 Do You Really Need A Business Plan?
b'One of the key components of what we talk about is how do you secure a better life and better future. So, of course, the thing is how do you decided to have a business and how do you plan for it? That is the business plan. Part of the motivation for this particular episode is that I was actually, on a call last night and somebody asked the question. The person who was moderating the call said, \\u201cOh no you don\\u2019t need a business plan.\\u201d Part of the conversation was about the fact that that was \\u201cold school\\u201d or \\u201cold hat\\u201d. Let\\u2019s talk a little bit about why you should have and why you need it. And what it does for you.\\n\\nBusiness Leaders Make Sound Business Decisions\\n\\nYou have an idea, you want to put it together as a business. What the business plan does is:\\n\\n \\tIt gives you and outline. First an outline and then something more thorough. To monitor your progress, hold yourself to what you plan to do and then give you more control of milestones.\\n \\tIt forces you to take a look at everything you\\u2019re doing at once. Think in terms of if you were writing a book. When you\\u2019re writing, you write the chapter, you forgot one detail, you go back and write it in or re-write the chapter. Have you ever thought, \\u201cI should have said\\u2026\\u201d or \\u201cI wish had mentioned\\u2026\\u201d? If you had it outlined prior to your presentation or in speaking to others it would have been so much better. The business plan is the focus for your entire business. It will show you how it affects your life, your family, etc\\u2026\\n\\nWhat is it, what does it do and how do you do it?\\n\\n \\tIt gives you the chance to decide what your value is to other people. When you\\u2019re either selling a product or service, what\\u2019s the value proposition (what it\\u2019s usually referred to). How can a person use it and why is it a value to them? How will they perceive it?\\n \\tMarketing: How will you present it? How are people going to feel? How will they use it? Why would they need it? How will you develop a want and desire for your product?\\n \\tProducing the plan: How will you put it together? If you have products, how will you escalate all the different products, at different times? All that needs to be set out so that you have an idea of all that you\\u2019re planning. Also as you\\u2019re going along what happens if you get off target? We all have biases on our own things. Over time, it\\u2019s okay to change your mind but having that business plan narrated out or outlined, it gives you the opportunity to say, \\u201cWait a minute, this is why I thought this in the first place. Do I have a real reason to make a change? Or is this a better alternative?\\u201d It holds you accountable not just for timing or finances and staffing but also for your reasoning.\\n\\nOne of the most important thing in a business plan is actually the end. You should treat every business as if it has a life that will end at some point and time. You may want to start a business and think of passing it down to your children or grandchildren, etc\\u2026 it\\u2019s a lofty idea but treat it that has 7- 10 year lifespan \\u2013 something reasonable. The reason for this is you don\\u2019t keep on investing without taking money out and putting it into funds for retirement, children\\u2019s education, or whatever you\\u2019re going to do. It keeps you more honest to run it as a true business.\\n\\nOn elevator speeches (I\\u2019m not a big fan of this) but you do need to be to talk easily to bankers, accountants or attorneys that you might have to deal with. Even more important, you need to be able to talk to people who might be interested on coming on board one way or another. That is really good talent to help you with your business. Whether it\\u2019s an actual employee or someone you can partner with. If you\\u2019re just saying things off the cuff, that does not sound solid enough for people to have the confidence in joining you. If you had a business plan, you have all that thought out. When an investor or client asks you a question you would have thought out all potential questions. That\\u2019s part of developing a business plan.'