The Business Plan
Fact: Should you be seeking outside
financing for your startup or early stage business, a business plan may be
necessary. (We don't make up the rules, we just learn them.)
Fact: Nowhere else is the Golden Rule: "They who have the
gold, rule." more prevalent than in the financial community investing or lending to
Fact: Business plans are often (and not always) requested by banks,
venture capitalists, angel investors, seed fund and grant administrators, etc. Fair
enough, it's their money.
Fact: However, "business plan
building" is a big business, as demonstrated by the thousands of books,
tapes, videos, courses and countless hours of business plan advisory services sold
Fact: Even your friendly, neighborhood, tax-subsidized, small business
development center will be happy to sell you numerous courses on business plans, with such
enticing titles as "Roadmap to Success" or "How to get a Loan."
Fact: The requirement for the business
plan has not been forwarded by those with the deep pockets, but propagated by academic
institutions filled with those who can't "do" so they "teach" and
preached by business planning consultants who make their money by convincing you to buy
something regarding a business plan.
Read any of the numerous online discussion blogs regarding the necessity of a business
plan to discover the only dedicated advocates are mid-level corporate managers (who
have never owned a business and never will) and those consultants who sell
business planning tools, advice, books, or workshops.
Additional facts to know about business plans:
- Even the most perfect plan ever written will not necessarily get
- Even the most perfectly written business plan perfectly executed will
not necessarily produce a successful business.
- The struggle in composing the business plan has caused more than one
potentially great entrepreneur to never launch a wonderful idea.
- There are literally hundreds of thousands of highly successful
businesses in operation today that were started without a college degree, deep pockets or
a business plan. For instance, with over 7,500 profitable businesses in business over 5
years surveyed, 78% reported they did not start with a business plan and did not have a
business plan. (You are invited to confirm this is your own community.)
- The next time you're hob-knobbing with Bill Gates, Donald Trump, Mark
Zuckerberg, Ralph Lauren, Michael Dell, the late: Mary Kay Ash, Steve Jobs, Sam Walton,
Henry Ford or Walt Disney (just to name a few), ask about their business plan? (They never
- Remember the huge "dot com" implosion? Every one of those
busted companies had a business plan that was read in detail by the investors and 99.6%
- Here's something you may find of interest: a Houston Chronicle
article Saturday, November 5, 2011 - email@example.com
about the 20 year old who just raised 1 million dollars: "We didn't
have an executive summary or a business plan . . . just two people and a story and a
- "Great businesses don't start with a plan." says
Anthony K. Tjan, CEO,
Managing Partner and Founder of the venture capital firm Cue Ball, Vice Chairman of the advisory firm Parthenon.
Further, he says " . . . of the entrepreneurs we surveyed who had a
successful exit (an IPO or sale to another firm), about 70% did NOT start with a business
plan" and "Early stage entrepreneurs don't need a business plan . .
." says Lonnie
Sciambi - The Entrepreneur's Yoda and the discussion: "Business
Plans - Necessary or Just a Bunch of BS?" "Business Plans are
Dead" says Ben Gartman, Executive Leadership Forum. "Business
Plans Are An Historical Artifact" says Brad Feld, Managing Director, Foundry Group Venture Capital.
- Funding start-ups through business plan competitions has become very
popular. Yet, the sponsors, most often a college, university or 501 (c)(3) charity
organization, only report the amount of funding awarded each year and never the success or
failure rate of the previous winners because the venture capital industry reports "
. . .start-ups funded through business plan competitions are less successful than those
funded with other selection processes . . ."
Now, if your mind is set on a business plan or you think
you have to have one for funding, we'll be delighted to guide you though it. Just be aware
that there is an alternative that is gaining wide acceptance as a replacement: "The Business Overview"
and we'll be equally delighted to take you through that, too.
The way it is: "Those
who can, do." "Those who can't, teach." "Those who can't teach, teach
teachers." "Those who can't teach teachers, teach business plans."
The way it should be: "Those who can, do and teach entrepreneurship."
"I started my business in the late 70's with a direct SBA
loan and a SCORE Counselor. My Counselor (God rest his soul) was a former business owner
who took his business from start-up to significant revenue - with no business plan -
before selling it and entering "retirement." Among his words to me were:
"Stay away from people who have no hands-on business ownership
experience, especially those who preach you 'must' have a business plan to be
C. Dean Kring
The best place to start generating money is a triple barreled approach with a marketing strategy, personal selling skills
and business networking.
And, just so you know, all funding sources will take a much closer look at you and your
business when you've actually starting making sales. Further, it would be great to
discover that you don't need outside financing because your sales are giving you all the
cash you'll ever need for expansion, a comfortable living and ultimate retirement
up for our Email Newsletter