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ChrisHeggem
03-08-2011, 03:44 PM
A friend of mine is thinking about starting his own business, but he is stuck writing his business plan. He's spent a lot of time writing it and still hasn't finished it. Now it's keeping him from getting out there and getting started.

What advice would you give to somebody who is struggling writing a business plan?

vangogh
03-08-2011, 04:32 PM
First is your friend seeking financing? If not there's no need to write a formal business plan.

The basic advice I'd give him is stop working on the plan and start acting on it. Business plans change. Other than the formal plan needed for financing, they exist to be a guide. They can and will change.

You'll find different opinions on this, but I like writing an informal plan. I did this when first starting out and revisit the idea every few years or whenever I think my business needs a change of some kind. I spend a few nights with a single open text file and simply dump any ideas in my head into the file.

I'm mostly thinking about the following questions in no particular order

1. Who are my customers/clients?
2. What products/services will I offer?
3. Where do my customers/clients spend their time?
4. How will I reach my customers/clients?
5. How will I make my products/services stand out in some way?

The act of writing everything down gets me to think through the ideas that have usually been in my head for awhile to that point and gives me a roadmap to follow. It's informal though and meant to be flexible. Also once I've spend the few nights writing things done I begin acting on what I've written.

I'm going to suggest that where your friend is concerned the business plan is just an excuse for not starting, especially if this is his first business. More likely fear is holding him back. Starting a business is not easy and there's usually some kind of risk associated with it. My guess is your friend is spending too much time thinking about what's he's risking than the reward he might gain.

You have to get him to take action, even if it's just a small action. Get him to commit to a business name and then register it with the state. Or get him to pick a domain name if a website will be involved. Get him to start doing instead of planning. If he can start taking real action steps toward actually having a business it might help him start taking more steps.

Harold Mansfield
03-08-2011, 05:34 PM
I agree that if it is not for financing, whether or not it is finished shouldn't stop him from getting started. Odds are that things will change as soon as you get out into the real world and start executing.
It's meant as a guideline based on your research and knowledge to keep you on path to certain goals. You will have to change and adjust things on the way.
There is no way that it can be a 100% accurate blue print of the exact path his business will and should take very step of the way.


There are plenty of articles online and cheap computer programs for writing a businesses plan. What exactly is he stuck on?

Dan Furman
03-09-2011, 02:04 AM
A friend of mine is thinking about starting his own business, but he is stuck writing his business plan. He's spent a lot of time writing it and still hasn't finished it. Now it's keeping him from getting out there and getting started.

What advice would you give to somebody who is struggling writing a business plan?

I'd say put it away and go make some money.

Spider
03-09-2011, 10:31 AM
Tell your friend to join SBF - we'll sort him out!

Harold Mansfield
03-09-2011, 01:51 PM
"I'm writing my business plan" can go on for years. Some people can use it as a way to justify not doing anything, while looking like they are doing something..meanwhile what is actually happening is that they are frozen in fear.

I know. I have 3 complete business plans in the file cabinet...none of them are for the business that I'm in now. For a time, writing the business plan was my way of fooling myself and others that I was getting ready to do it.

If it were for funding..most people would bang that out as quick as possible for a chance at some money to get started.
Also there is nothing that says that you can't plan your goals as you go along. The plan changes.

If you have the first part down..."how to get started" then it shouldn't matter that you don't have the ending written because it's all really speculation. After the hard facts about known costs, and operating expenses...once you get to the estimating income part...it's all BS. Sure, you can put down an idea based on someone elses business, past experience with another business, or even market research..but you really don't know until you put your foot in the water.

If it's not money that is holding him up, then it may be fear. Especially if there are other people to consider or he has a family that is dependent on him. Those are very real concerns that need to be thought out carefully.

J from Michigan
03-10-2011, 08:34 PM
My best advice... write it in pencil.
Because odds are, it's gonna change! :D

Obviously I don't mean literally.
But like the others said, don't let it keep him from moving forward. :)

ChrisHeggem
03-23-2011, 06:34 PM
Thanks for all your advice.

@Dan, that's exactly what I told him. Too much guessing and not enough doing was holding him back. I'm proud to say he's up and running now and is having a good time. I shared with him many of your comments and he definitely appreciated it.

Dan Furman
03-23-2011, 06:40 PM
Thanks for all your advice.

@Dan, that's exactly what I told him. Too much guessing and not enough doing was holding him back. I'm proud to say he's up and running now and is having a good time. I shared with him many of your comments and he definitely appreciated it.

This isn't a hard and fast rule, but usually my advice for people just starting out is "go make some money doing what you want to do, and go where that leads you".

vangogh
03-23-2011, 08:51 PM
Dan and I disagree about this some. I do agree you don't need to write our a formal business plan. Those are for banks and investors. I do, however think it's important to spend some time planning your business. I think before starting a business people should at least spend a few days or a week thinking about a few basic questions related to what market the business will server, how is it going to get word out to that market, how is the business going to differentiate itself from the competition, what's the business' brand going to be, and how is the revenue model going to work.

Oddly enough because of this thread and a blog post about business plans I ended up writing my own post about business plans and business planning. It'll go live tomorrow morning.

I agree with Dn that you have to actually get out there and be in business, but I think those that jump in without any planning are usually going to be less successful. You don't need to project revenue and things like that. Again I'm not talking about formal business plans. I simply think some planning and thought about how you'll try to succeed is better than winging it.

In the case of your friend I do think he's using the plan as an excuse to not actually start so it's likely time for him to stop planning and start doing.

Capitalist
03-24-2011, 10:48 AM
There is a difference between activity and action. It sounds like your friend was very active in writing him business plan, and that let him feel like he was getting somewhere with his business - but the fact is, until you start actually producing something, you're not really taking action. Action is the foundation of success in business. It's far better to attempt and fail than to never start at all because you don't feel you have everything figured out yet.

Obviously, this applies correspondingly less as capital investment increases :)

Dan Furman
03-24-2011, 02:41 PM
There is a difference between activity and action. It sounds like your friend was very active in writing him business plan, and that let him feel like he was getting somewhere with his business - but the fact is, until you start actually producing something, you're not really taking action. Action is the foundation of success in business. It's far better to attempt and fail than to never start at all because you don't feel you have everything figured out yet.

Obviously, this applies correspondingly less as capital investment increases :)

Indeed - if you are taking out a loan, getting investors, etc, more planning is needed.

On this forum, I'm pretty comfortable w/ my "go make money" approach because the types of startup businesses that we typically talk about here are very small - kitchen table / garage entrepreneurs for the most part.

But just to clarify, I am not saying zero planning is needed. I do agree with VG that some thought needs to happen. But I'm in favor of just a few nights of thinking about it, maybe some scratching on a legal pad, then go out there and make a buck.

Capitalist
03-24-2011, 05:40 PM
Indeed - if you are taking out a loan, getting investors, etc, more planning is needed.

On this forum, I'm pretty comfortable w/ my "go make money" approach because the types of startup businesses that we typically talk about here are very small - kitchen table / garage entrepreneurs for the most part.

But just to clarify, I am not saying zero planning is needed. I do agree with VG that some thought needs to happen. But I'm in favor of just a few nights of thinking about it, maybe some scratching on a legal pad, then go out there and make a buck.

Exactly.

In my area, internet marketing, I'm always either planning a new venture, launching, or preparing to put it into "maintenance mode" so it doesn't take my time any more. Before I launch a project, I use mindmapping software to get all of my ideas on paper. Then, I'll put together a 1-page product summary with a state goal, and simple, one-sentence statement of methodology, and a list of time and money requirements.

That's all I do in terms of planning for most projects. It seems silly to write out a document just for myself, but it keeps me on track. It also helps to file it away, and when I come back to a project that has been successful, reading that summary will energize and motivate me as to what I was trying to accomplish in the first place. It helps to minimize the scope creep that we all experience when we are working on individual projects without a well-defined end.

vangogh
03-24-2011, 11:59 PM
Dan I guess we do agree. I'm not advocating months of research either. A few days, maybe a week of writing down some thoughts about how you'll make your business work. Create a document that you can format however you want and revisit it periodically.


I use mindmapping software to get all of my ideas on paper. Then, I'll put together a 1-page product summary with a state goal, and simple, one-sentence statement of methodology, and a list of time and money requirements.

That's similar to what I do. I tend to use freewriting more than mindmapping, but otherwise it's similar. I also write down thoughts about how I plan to go about marketing and things like that. For me it's mainly a brain dump that I then shape a little to come up with an overall strategy.

Spider
03-25-2011, 10:50 AM
We seem to have drifted into two different areas of this topic - the writing of a business plan for a business and the writing of a business plan for a project or product. They seem similar but to me they are very different. It also depends on the industry as to which needs to be more complex.

The business plan for a construction company, for example, can be quite simple and basic, but the plan for a construction project needs to be highly detailed and very complex, the more so the larger the project. OTOH, the business plan for a university will probably be very complex, depending on the number of departments and breadth of the curriculum, while the plan for each course could be quite simple.

As far a 'business' business plan goes, I do not agree that a detailed plan is only required for financing purposes. It is not correct to say that business plans change, as if they change of their own accord. It is true that the business may deviate from the plan as it develops, but the plan does not change until and unless the owner changes the plan. The value of having a detailed plan in the first place is to prevent this deviation and, if deviation in the business occurs, one can either correct the business and get back on track according to the plan or change the plan if that is considered desirable. If the situation is left unattended, the business moves ahead without a plan and I do not believe that is wise.

This may have been intent of the opinions expressed so far, but I just wanted to clarify these points.

vangogh
03-25-2011, 01:44 PM
I do not agree that a detailed plan is only required for financing purposes.

I think that's a fair point, though it depends on a couple of things. How you define a business plan and what kind of business we're considering. For example with the latter I would certainly write a much more detailed plan if I were looking to start a new search engine to compete with Google and Bing. I would spend more than a few hours over the course of a week planning how that business would be successful. However most of us here aren't looking to start businesses with such lofty goals. Some perhaps, but I would think most of us are simply looking to start a business that can support us and our families and provide a decent living.

Small businesses like many of us here can get too caught up in the planning, which becomes an excuse not to actually start the business. I'm pretty sure that's where Dan's thoughts come from and I know it's where mine come from as well. Using my own business as an example (which admittedly is only one type of business) it would have been a waste of time to spend hours working on financial predictions, because in the beginning they would have been 100% guesswork. That guesswork wasn't going to help me create a more successful business.

The other question about how you define a business plan is also important. I do think the formal business plan you find in books about starting a business or in the sample plans you find on the web are mostly about financing, especially where small businesses are concerned. For example most of those plans will have a section describing the experience or skills of the management team. Again looking at my business what would be the point. I'm 100% of the management team and I'm also 100% of the reading audience for my plan. I feel confident in saying I'm aware of my experience and skills and don't need to write them down for my own benefit.

It's the formality of the typical business plan that I don't think important for people wanting to start small business. What I'm talking about with the idea of an informal plan is to do business planning as opposed to writing a formal plan.

How much detail you plan likely comes down to how much of an investment you need to make to start your business. The more investment up front the more it makes to plan out some details. When the investment is minimal or even nothing you really don't need to figure out all those details in advance. You generally don't have enough information to plan those small details until you've been in business a little while.

I think it's important to think about some of the higher level aspects of how your business will succeed. I think you should think about questions like the ones I mentioned in my first post in this thread. Use those questions to help you form an overall strategy. Then as you get real information and data from being in business adjust your plan.


the business plan for a university will probably be very complex

Agreed, but keep the context in mind. We're a small business forum. I'm pretty sure no one here is looking to start up a university and I doubt anyone who joins in the future will be either. We're not so much talking about business plans as we are small business plans. Most of us will be better served by doing as opposed to planning once we get past planning out a few high level strategical things.

Spider
03-25-2011, 08:46 PM
... I would certainly write a much more detailed plan if I were looking to start a new search engine to compete with Google and Bing. I would spend more than a few hours over the course of a week planning how that business would be successful. However most of us here aren't looking to start businesses with such lofty goals. Some perhaps, but I would think most of us are simply looking to start a business that can support us and our families and provide a decent living...Is that really true? My experience is that people say they just want to start a little business of their own, but when questioned further, they most times hope it becomes a successful business and grows into a substantial business. Nobody starting out has yet told me, "Oh, No! I don't want my new business to grow and be successful." They say, "I would like to have a few employees and maybe hire a manager some time in the future so I can spend more time ....(doing something other than manage - do the design work, work on the tools, play golf!)....." I have never heard a new business owner say they want a business that just supports themselves and provides a decent living. Those remarks come later, when reality has taken over from the dreams and "a decent living" has become all they dare expect. Initially, I have found, they want a good living -- a very good living -- beautiful house in an upmarket neighborhood, private school for the kids, foreign travel, luxury car, motorhome, boat, and so on.

The point is, those things are going to be very unlikely unless planned for (or luck plays some part.)



...Small businesses like many of us here can get too caught up in the planning, which becomes an excuse not to actually start the business...That can happen -I agree with you there. But I do not agree that a few hours or a few days are going to be enough.



... Using my own business as an example ... it would have been a waste of time to spend hours working on financial predictions, because in the beginning they would have been 100% guesswork...I do not believe it would have been a waste of time. Certainly not because predictions would have been guesswork. Dreams when thought about become Guesswork, which when researched become Estimates, which when analyzed become Predictions, which after strategizing become Projections, which when clarified become Goals, which when turned into action become Achievements.



... That guesswork wasn't going to help me create a more successful business...That guesswork most certainly would, if you had followed through as above described. Or, I must say, "could have" if you hadn't decided you wanted a business that was going to provide no more than a decent living.

None of this is to say you shouldn't have wanted what you have, only to say that planning a business is a very crucial part of the process. We tend to get what we plan for, and if we don't plan, that's just about what we get.

vangogh
03-28-2011, 12:15 PM
Nobody starting out has yet told me, "Oh, No! I don't want my new business to grow and be successful."

And that's now what I said either. Growing and being successful is not the same thing as creating a large corporation. I said I think most people are looking to have their business be able to support them and their families and provide a decent living. I think that would qualify as being successful and it also requires a business to grow from its beginnings. Someone can aspire to a 6 figure income, which I think most people would consider successful without looking to build a business with hundreds or thousands of employees.


I do not believe it would have been a waste of time.

Sorry, but guessing at financial predictions would have been a waste of time for me. There wasn't anything to research or analyze to lead estimates, etc. When I first started there was no way to put any numbers on how many jobs I would have early on. It would have been 100% guesswork. The only way to collect the data was to start working. 6 months I could more reasonably predict how the next 6 months would go. Before starting though there was nothing to plan around. Dreams are great, but you can't plan around a dream. You can set goals around dreams and help motivate yourself, but that's very different than planning. You also don't need to spend time coming up with financial predictions in order to dream, set goals, or motivate yourself.

I'm not suggesting people should skip planning their business. I've been saying they should since they started this thread. I'm saying the formal business plans you see in books and in the sample plans you can find online aren't. Planning is important. Following a rigid format isn't.

nealrm
03-28-2011, 02:11 PM
I'm going to add a few things to what Vangogh mentioned. First is that I highly suggest doing a budget. The first rule of business is to manage you money, without a budget you are just winging it. Second, look at your competition. What are they doing right, wrong, what segments of the market do they serve and how saturated is the market. Next, what is your exit strategy. This is your reality check when thing are not going well. If you think this out while your head is clear, you are less likely to throw good money at a failing business.

By the time you answered these questions and the 5 from Vangogh you have a business plan.

I truly believe that the reason that most businesses fail is do to lack of planning. While it is possible to be successful without planning, you are more likely to successes with a plan in mind. Just like a road map: you can get from New York to LA without a map, but it is easier and quicker if you have one.

PhonenixTS
03-28-2011, 05:30 PM
Just tell him to make an outline. Don't sweat the small stuff. Just make sure you know when you are going to make your money back - once you figure that out, you're golden!

Damon the Marketer
01-15-2014, 07:10 AM
Unless you're applying for a loan or investment, ask yourself if you really need a business plan.

Generally, if you can draw a business model, you're good to go. This means you have a picture of how you get sales, customers, clients, etc. and where you place your marketing efforts. Business plans are boring and always full of "corporate speak" even when written by an entrepreneur.

Rose
01-31-2014, 12:40 PM
I can kind of relate to this friend being stuck on getting through the business plan. If you go to your local SBC they will give you this reading material which outlines what the business plan needs to have, the format, the font style and size... OK I'm kidding, but it's almost that bad. When I did a BP for my restaurant it took me almost three weeks to read all the stuff, online research looking at others' business plans and formats, and then, low and behold, didn't get the loan anyway because it was for a restaurant and most of those fail so no bank will loan you money on it. Well maybe if it was a franchise, but certainly not a small mom and pop kind of restaurant.

So, since everyone here seems to think that having one scratched out on paper is good, and I like the few items that are listed in vangogh's post earlier. What other questions would be good to add, if any, to that list?

I also agree that it is necessary to ask some of those hard questions like, who am I trying to sell this to? How will I reach them? Do I have a marketing plan and enough money to market it? But more than anything, I think it's the formality of the whole small business plan which really bogged me down.

FlyPizzaGuy
01-31-2014, 06:11 PM
Stay positive. Putting a business together is like a puzzle. Keep working at it and it will eventually all come together if the trade is well known from the provider.