Most would agree that if you’re planning on starting your own business, you probably, most definitely need a business plan. I, however, am a notorious dreamer, who believed at the beginning of my entrepreneurial journey that business plans were merely a pointless distraction from the important job of actual execution.
So when it was time to secure financing for all of my big dreams and I was finally coerced into sitting at a desk and drafting this plan, it’s not hard to guess what the result was: not very good. Actually, dismal. And that’s being nice.
So in my usual style of using my past embarrassments to illuminate your path to entrepreneurial greatness, I’ve decided to share what my business plan lacked, and what I needed to learn in order to forward my vision. A special thanks to the financial advisor at CIBC who opened my eyes to the importance of a business plan and helped to guide me through my mistakes with these helpful tips. I forget your name, but you are awesome.
First thing lacking from my business plan was a strategy. Now that sounds pretty basic, but it’s not. You see, a unique business strategy is the key determination of how you’ll compete (and win) against other businesses in your market. This aspect of your plan needs to be written with precision and specificity to guarantee you a shot at winning the big game. My original plan stated something about representing clients through short and long term marketing campaigns in and around the city of Toronto. Lame. A better and more specified competitive strategy: Securing placements with stores in post-security airport environments to offer my clients a unique and exclusive forum to develop marketing strategies for an audience unreachable by their competitors.
Of course, one of the things needed to determine how you’re going to win against your competitors is an understanding of who your competitors are and what they do. The second mistake I made was not including enough research. Come to find out, when I actually did do my homework, the benefits were tenfold, helping me to understand my competition and, more importantly, to learn from their mistakes.
Can I share something I did right with my business plan? I think I’ve pointed out enough flaws with my methodology to warrant one good pat on the back. SPREADSHEETS. Forecast what’s likely to happen, what could go wrong, and get comfortable with the tasks of drafting financial forecasts and documents. If you’re a whiz with an Excel spreadsheet, that’s a bonus. If you’re not, get some help. Grant authorities, financing officers, and investors will insist on this, but even on a personal level, getting the facts and assumptions down into a compact and navigable format can create a powerful decision-making tool.
The biggest lesson I learned, though, was in creating a business plan that was realistic. Entrepreneurship is not easy by any stretch of the imagination, and padding your business plans with unrealistic growth patterns and valuations screams a lack of preparedness and awareness. Even if you believe it, investors won’t, and you’ll suffer the setbacks that come with a naïve perspective on you endeavours. Trust me on this.
Business plans are valuable in so many ways, but a business plan that mirrors my original attempt will probably take you a step backwards in accomplishing your business dreams. Take your time, and draft a plan that works for business and is true to your vision. It can be a difficult balance, but the details create the big picture.