If You're Already Running a Business, You Probably Don't Need a Business Plan
Your business is growing too fast… or not growing fast enough. You’re at a networking event and someone mentions a business plan.
Momentary panic! All of a sudden you realize that you just started your business without creating a formal business plan. Are you doomed to fail? Is this the source of all your stress?
Let’s take 60 seconds and determine whether you in fact need a business plan in order to have a successful startup.
When and Why You Need a Business Plan
Why is it important to have a business plan? Is it only because someone said you’re supposed to have a business plan, or is it actually going to help your business?
There are two instances where it really helps to have a business plan: before you start your business and when you’re seeking funding.
Before You Start Your Business
A business plan will help you determine whether your concept is viable, what revenue you can expect, when you’ll start to make a profit, whether there is a market for your product, and how to price your products or services. Pregaming your business with a formal Business Plan is a great way to check your assumptions and see where your weaknesses are so you can get business consulting in those areas.
When You Need Business Financing or Funding
Before you take on a business loan, line of credit, or investors, you need to know exactly where that money will go, what your business budget is, and how soon you will be able to pay it back. Pregame your financing with an updated Business Plan that reflects the next money stage of your business.
The Pregame Approach: Why Your Game Plan is More Important than Your Business Plan
Once your business is running, it’s time to create your game plan.
Game Plan, Ciara Pressler’s book on business goals and the basis for Pregame, explains why taking a more short-term focus on your business is more realistic than attempting to make an annual or multi-year plan.
Our current business environment moves far too fast to adhere to old school methods of forecasting. By the time you reach Q2, you may be dealing with an entirely different climate, from internal factors like product development to external ones you can’t control, like the economy or new competitors.
While it’s important to have a long-term vision, it’s far more vital for young businesses to know exactly what needs to be done in the next four to twelve weeks.
At Pregame, when consulting with small business owners, founders, and creatives, we don’t recommend creating annual marketing or business plans. Instead, we help them create game plans: identifying immediate goals and laying out the exact actions, resources, and people it will take to get it done.
A game plan empowers entrepreneurs and team leaders to move past obstacles endemic to small business:
You focus on perfecting a product and neglect to put equal energy into creating the systems necessary to sustain a profitable business.
You get overly distracted by new competitors and their initiatives, and allow that to sidetrack your core strategy.
You overestimate the effectiveness of what’s been done in the past simply because it’s what you’re used to.
You block a fantastic product from reaching its audience by being loyal to marketing materials and practices that lack the sophistication or specificity to connect with the audience that will embrace it.
You put the different departments of your business in a silo and neglect to connect them with the bigger business model, sales process, and company culture.
You assume we have to do what everyone else in our industry is doing and chase goals that won’t actually get you where you want to go.
You take on too much at once and as a result, all of it gets started and none of it gets accomplished.
You change your strategy the moment you get bored, scared, or distracted.
You don’t ask for outside help when you desperately need objective advice.
You give up too easily when you get stuck.
All of these challenges are common. But they have solutions, and it’s often easier than you expect.
It begins with clarifying why you’re in the game, creating ambitious yet achievable goals, and identifying a Game Plan to get from here to there.