Seven words you never hear…
Seven words you never hear as an entrepreneur…or, ever…maybe. But, stick with me just a few minutes longer.
If you ask me for my business plan for DoodleDirect, my visual and digital communications firm — it’s likely that I’ll pull out a series of notepad scribbles, napkin doodles, MacBook Notes, draft emails, half-constructed Google Drive docs all with a running commentary stream of consciousness…well, you get the picture.
Why? Because that’s basically what my business plan consists of. Lots of roughly pieced together ideas and spreadsheets based on my brain dumps and brainstorms at various moments over the past few years.
And you know what? — it’s okay. DoodleDirect is a thriving company that has doubled its turnover year on year (Impressive right? Well, it’s actually only been two years…) with a six-figure turnover and a profit.
I guess the point I’m trying to make is that a lot of people might look at DoodleDirect and consider it a “success story” …and guess what? I don’t have a painstakingly crafted 75-page document that a government-appointed “business adviser” once told me I would most certainly need if I was going stand any chance of running a “successful business”.
So, here it is, you don’t need a business plan to start a business.
Wait! There’s a caveat.
If your business idea is a little larger than average and requires a few million in seed capital to get it off the ground then, yes, you might need to invest a bit of time getting a decent business plan together, but even then, in my experience, a lot of forward-thinking investors and venture capitalists are more interested in how the business will work in real life (i.e. proof of concept) rather than how the business might work in theory.
Also, if you’re looking for a good ol’ fashioned bank loan then you might need a few bits to show to the bank manager that one day you might just be able to pay that loan back.
Here are three reasons why I reckon you don’t need a business plan:
1. What is written on paper “in theory” almost NEVER reflects what’s going on in real life. You can plan until the cows come home but the moment one small variable changes, the whole plan goes out of the window. It would be very easy to spend every day rewriting your business plan for the following day simply because every day can be unpredictable and brings about unexpected challenges.
2. They take ages to write. And most of it you’re pulling out of thin air. And all that time spent writing is not being spent on creating a business and ultimately, making money, which is pretty much why you’re in business in the first place. So, get on and do business. Also, by the time you’ve finished writing a beautifully formatted document full of made up numbers, it’s possible that someone else could be out there now doing what you planned to do — you missed the window of opportunity. The longer you spend on planning, the longer it takes to get your business off the ground, the longer it takes to make any money and before you know it, someone else is out there with your idea. Sometimes you just need to do it.
3. Once you’ve written it, the odds are you’re going to want to follow it. The thing is, a business is its own beast and once you get going it rarely looks anything like you first imagined it would. By sticking rigidly to your carefully crafted plan you’re going to be a lot less nifty, less agile and unable to react or change direction quickly (something that needs to happen quite a bit in the beginning, and trust me, it’s nothing to worry about).
So…if you’re still onboard with my theory, and you don’t have a “business plan”, what do you need instead?
1. What exactly are you selling? (Be specific. If it’s only one thing that’s fine — sell one thing and sell it well. You can expand your services/inventory etc as you go along.)
2. Who are you selling it to? (Be specific. Decide exactly who you would like to buy your wares, then go and sell them one to make sure.)
3. How much are you selling it for? (pricing strategy is a whole other blog post, but basic business sense dictates that it should be for more than it’s costing you to make it/provide it)
4. Who else is selling ‘em? (If there is someone out there doing what you’re doing, how’s it working out for them? If it’s not so good, consider why this might be. If, after this rudimentary risk assessment, you feel you can do a better job, go and do it!)
5. Why should someone buy it from you instead of the person listed above? (What makes you so special?)
6. How will you let people know you’re selling? (Whether it’s standing and yelling on a street corner or a full-on marketing campaign, think about which one is feasible for you.)
7. What are you going to do when someone buys what you’re selling? (How are you going to make sure your customer receives your product or service? More importantly, how might you get them to buy another one?)
This might all seem a little simplistic…that’s because it is. With the information above you can start your business, keep it simple and see if it works. If it does, do it some more, make a bit of money, put it back into the business and see if you can make it bigger. And repeat. The aim is to make sure you’ve evaluated the risk just enough to know that the chances of this succeeding are higher than it not.
There is a time and a place for business plans, but it’s probably neither here or now. It’s much more practical to harness your passion, energy and enthusiasm for your idea and get on with starting your business. Does it work? Is it what you expected? No doubt you’ll tweak, change and improve as you go.
Don’t get bogged down with lengthy documents, imaginary numbers and hope. You don’t know if it’s going to work until you actually do it — so get out there and DO IT NOW **Schwarzenegger voice** …and let me know how you get on.
Has anyone else started a business without a formal business plan? Share your thoughts, ideas and successes below!
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