Do we really need a business plan
How to start a business? Of course, tell every second man, the business starts with a business plan. This is taught every green student who enters the profession, one way or another associated with entrepreneurship. So considers, in particular, and Professor. Gartner, which specializiruetsya on managing the business, sitting in the famous University of South Carolina, which is named Klemanski. «It is impossible to overestimate the importance of a comprehensive and thoughtful business plan,» – says the Professor to their students.
For and against
However, William Bygrave, Professor Emeritus of Babson College, at the time engaged in a very important and revealing study. He several years studied the work of their graduates who become entrepreneurs. And here is what conclusion Professor Bygrave made: «We are unable to find any difference between those graduates who began their activities with a well defined business plan, and those that did not carry out such work.» In other words, the presence of the business plan did not affect the ultimate success of the enterprise that a few shakes, I agree, preconceived opinions.
However, the study was not sufficiently large, in order to have an accurate opinion on this matter based on the findings of Bygrave. Back in this case to Gartner, he has also conducted research on this topic, and at first this Professor was in the position of a skeptic. It involved a large online University and conducted a survey of more than 800 people who were in the process of starting a business. It turned out that those people who had a business plan, got into the business two and a half times more often. The rest are not even open. This is quite a powerful indicator, which should not be ignored.
Then followed other polls. It became known that those entrepreneurs who develop business plans do much more things than other guys. And we talk about this market research, preparation of forecasts. This is all extremely important to start a business.
Again pass the baton to Bygrave. He continued to analyze my research suggested that premature writing of a business plan is a waste of time. First you need to open doors for business, make sure that you have clients. Talk to the customer and only then start thinking about business here than in his thought.
Mental planning, says William Bygrave, often more important than the empty division of a not killed bear. Take care of marketing, gather a good team, prognozir. The master plan is a plan in your head.
The factor of money
Fans and haters of business plans agree on one thing: funding cannot act without a formal plan. Assume that companies that are funded from his own pocket or by the efforts of families absolutely don’t need a plan. However, if we are talking about venture capital funds, commercial banks, support from the state, interactions with creditors and investors, then you’ll need a business plan.
If you want to be a responsible entrepreneur, you should be able to show your project to an investor for what he is, really. This expects you to be any person who is sponsoring your business, investing.
The plan must include several scenarios. Familiar to many young entrepreneurs plan in pink should serve as an inspiration for the sponsors. Without it no one can not do, is to make. In fact, it is a plan for how everything should work at best. Then the word for a harsh realism, is to work much more carefully. Well, and then – disaster scenario, which takes account of numerous accidents. Uncertainty discourages investment and having a plan in case of global disaster will render you a good service.
There are some rules in writing business plans. It is believed that the amount should be 20-40 pages of pure text, however, the practice shows that it is better to write much shorter. Enough 5-6 pages to describe. It is not necessary to include in the text of figures that you can’t instantly explain.
Investors want less wastage and more documented indicators. Spreadsheets no strike, says Gartner. Well, you created a table with cash flow and potential profit. All this, frankly, sucked from the air. The investor is much more important to see that the entrepreneur has studied the market, studied your product, he identified potential customers, assembled a capable team, devised a business model. They want to see action. Modern business plan- it is rather colorful and clear presentation than a thick stack of white paper.
The bygrave says that a business plan is sufficient for 20 slides 6-8 lines on each slide. And it will work better than something else.
Conclusion and future
However, conventional business plans don’t disappear. The fact that institutions, various courses on entrepreneurship teach their graduates to do things a certain conservative way. But such rules are not always related to what investors really want. The investor may be one of the most subjective people in the world. But once you teach students, they will write all those cumbersome multi-volume works on the opening of a small production.
Note that writing a business plan has another important feature. The planning process itself encourages people to start a business. The plan inspires confidence in the mind of the budding entrepreneur. But don’t spend all their intellectual power. A business plan is important, but it does not determine the success of the enterprise, and its thickness does not make the value of your project is more significant, rather, quite the contrary.