Many startups have the mistaken notion that the primary purpose of creating a business plan is for raising business funding. If this is what you believe, you need to seriously re-think your beliefs. It’s important to realize that your business plan needs to be an ever-changing document.
In many ways, a business plan is like a theory. Theories are made up in order to explain how something works. Their purpose is to enable us to make predictions of cause and effect. Unfortunately, the originators of theories are often unaware of variables that will affect the outcome of what the theory is trying to predict. The same is true for business plans.
When you first write a business plan, you have a theory that there is a huge need for what your company is offering. You further theorize about your potential customer base, and what they’ll be willing to pay for your product or service. You also have a theory of what will be the most effective way to market and sell to your customers. As your list of suppositions and assumptions go up in your business plan, the number of ways it can go sideways, and potentially derail your whole plan, goes up exponentially. As a result, it is imperative that you and your management team always be flexible. Realize that your initial business plan is at best an educated guess of what will be required to achieve business success. You must also be willing and able to adapt when you find that your theories don’t match the realities you are encountering in the marketplace.
As you engage in your business, your list of best guesses and assumptions will be replaced with actual results that more accurately describes reality. As you become aware of this new information, you need to adjust your business plan so that it fits better with how things actually are, rather than how you theorized they would be.
In many ways executing a business plan is like going into a battle. In a battle, almost nothing goes the way it was originally planned. This is also true when you are in business. For example, you might run into regulatory hurdles that you were not expecting. You could encounter a competitor that recently launched a product similar to yours. Marketing strategies and sales strategies almost always have to be tweaked and changed after getting customer feedback, or after analyzing their effect on sales. The list of things that can throw a wrench into your original business plan is endless. As long as your business plan is flexible, your business will survive and prosper.
Having a constantly updated business plan will also give you a well-organized analysis of your product or service and your competition. Having updated financials lets you know if you have sufficient funds to execute new marketing plans, hire a key employee or launch a new product. Most importantly, having an up-to-date business plan helps you always be ready for raising outside capital from an Angel investor, venture capital firms, an initial public offering or through debt financing.
In summary, it is vitally important to make a business plan before launching your new business. It is also important that you constantly update it so that your business plan is dynamic and flexible. Having an accurate and up-to-date pulse on the factors affecting your business will enable you to be capable of overcoming any obstacles that will inevitably come your way.
Always remember that the winners in business are the ones that can adapt to the ever-changing marketplace. That’s why you have a management team. Their job is to constantly be analyzing what is working and what is not. To find solutions. To locate new opportunities. In the end, your business will most likely end up being very different from what you initially envisioned. The good news is that it will probably be much better and more profitable that you could have ever imagined when you first wrote your business plan.
If you are seriously contemplating starting your own business, I would recommend that you check out NewBusinessCreator.com. This web site simplifies and condenses the important things you need to achieve business success. It also serves as a portal to a number of affiliated listing sites that enable you to obtain the business funding, human resources, materials and marketing tools that will be required make your dreams a reality. So are you ready to make your dreams come true? Is it time to stop wishing and start planning your new future? If so, you owe it to yourself to visit NewBusinessCreator.com. You have nothing to lose. Access to the site is totally free. Remember that access to all of the listing sites for transforming your plans into reality can also be found in NewBusinessCreator.com.
Written by: Mark J. Krupp, Confounder of NewBusinessCreator.com