The Entrepreneur and the Business Plan

I have blogged in the past on the advisability of the entrepreneur having a comprehensive business plan. What I have found in dealing with many different types of businesses and entrepreneurs over the years is that the task of putting together a business plan can be extremely daunting particularly for those who have never been down this entrepreneurial road before. It doesn’t have to be like that however, once you know where it is that you want to take the business, putting together the business plan is a fairly straightforward process.

The first thing that you need to get in mind is that the business plan is simply a map detailing where you want to go to with the business, imagine it as a journey with a start point and an end point. The plan is the map of the journey showing which direction you are going to take and detailing the points that you need to pass on the way to the end. If you were to start a journey and were not sure where you are going to you could end up anywhere. The business plan will get you there.

My experience has shown me that most entrepreneurs start out on their journey with no clear insight as to where the journey will take them and end up in a horrible mess. Sometimes they do put together a business plan but this can be a long time after they have started and they have no idea where they are so they have no clear starting point and therefore no clear ending point. The end point of any entrepreneurial endeavour should be getting the business running so well that it is able to be sold. I once had a business coach tell me that every business should be ready for sale at any time.

The business plan must have included in it a clear exit strategy, a way for the owner to derive maximum benefit from all of the hard work that they have put in. I read a report recently (for New Zealand) that the vast majority of small and owner operated businesses that are supposed to provide for the owners retirement will probably have to be closed down rather than on-sold. This is a clear indication that no exit strategies have been put in place by the business owners, you do not want to be in this position. When you are ready to move on you need to have the business in such a position that selling to a new owner is a relatively straightforward task that will give you maximum benefit.

                           

I will continue this in future posts, I have a firm belief that the business plan is an essential tool for you to have and will give as much assistance to you as I possibly can.