As an entrepreneur since 1987, I’ve learned many lessons along the way, some more painful and expensive than others. This week I presented a workshop to entrepreneurs just beginning their journey and finished my week by sharing my story at Startup Grind.
One common thread was woven between the two conversations--that of a business plan---and the question of whether it’s necessary.
With the rise of nontraditional philosophies in the startup world, the idea of a business plan, what its purpose is, and whether it’s necessary has evolved. Some believe you only need an Executive Summary; others believe a “pitch deck” will do. Some still insist that a full-blown business plan is necessary. Conflicting advice can confuse a new business owner diving into entrepreneurship. So what’s the answer?
I believe an Executive Summary is a synopsis of the business model and how you plan to execute. The “pitch deck” is a visual presentation you prepare to present in front of funders. A business plan, however, is a living, breathing document meant to guide you, show you “holes” in your idea, and give you a strategy to start, grow and exit.
Let me share a personal story with you…..
One day my spouse came home and announced that because we live in Colorado there would be a demand for log homes; we were going to become distributors of log homes. We invested the money to represent a quality brand, bought leads lists, and made calls. Day after day we made calls, sent letters and made more calls. Nine months later we hadn’t sold one log home. We closed up shop.
Having a business plan before beginning would have told us how many potential clients we had within our territory that would be interested in purchasing a log home, how many we needed to sell to be profitable, and potentially identified that I wasn’t the best person to be an executive in this company.
Another time we decided we’d like to open up a store that sold hot tubs. We researched hot tub manufacturers, identified a growing market we could operate in, connected with home builders who could be referral sources, and wrote a business plan. During the course of doing our due diligence, we realized that we were undercapitalized. We also realized that our family life would be out of balance for too long, and that wasn’t a price we wanted to pay. Doing a business plan helped us to decide we didn’t want to go into this business.
A business plan…..two different results, two different decisions to implement using a plan.
Having a business plan that you revisit at regular intervals allows you to plan, evaluate and adjust. This continual cycle will help you meet needs and identify pitfalls, navigating the ever-changing waters of your business. This is why I call a business plan a living, breathing document. It should be used to guide you as you enter different phases of the business growth cycle.
Just as every coach uses a play book to guide his team, every successful entrepreneur uses a play book, or business plan, to guide his team.
An Executive Summary and a “pitch deck” serve a purpose; but, a business plan is your play book.
Just ask an entrepreneur who has forged ahead without one and used one to determine it wasn’t a game she wanted to play, avoiding risk and a potential fumble.
Want a successful business?
Create your own business plan!
Bio of Royce Gomez:
Royce Gomez, founder of RoyceTalks, is recognized as a leading authority for coaching and training entrepreneurs and executives. She has been published in the HuffingtonPost, Unlimited Woman, Charity Magazine, and is co-author of The Stories and Daily Habits of Highly Successful Women and international best seller Discover Your Destiny, Live Your Dreams, Love Your Life. She has appeared on Front Porch Radio, Networking Diva Hour, Startup Grind, and has her own podcast, Thrive: A Woman's Journey to Victory. Royce has spoken to audiences ranging from 20-1000+. Her coaching has been a catalyst for companies to experience double digit growth in a short amount of time. She has effectively coached successful business owners who were in transition, both in business and their personal life. Royce effectively helps business owners develop strategies, their personal brand, and marketing initiatives to take their business to the next level of success.