One of the key components of what we talk about is how do you secure a better life and better future. So, of course, the thing is how do you decided to have a business and how do you plan for it? That is the business plan. Part of the motivation for this particular episode is that I was actually, on a call last night and somebody asked the question. The person who was moderating the call said, “Oh no you don’t need a business plan.” Part of the conversation was about the fact that that was “old school” or “old hat”. Let’s talk a little bit about why you should have and why you need it. And what it does for you.

Business Leaders Make Sound Business Decisions

You have an idea, you want to put it together as a business. What the business plan does is:

* It gives you and outline. First an outline and then something more thorough. To monitor your progress, hold yourself to what you plan to do and then give you more control of milestones.

* It forces you to take a look at everything you’re doing at once. Think in terms of if you were writing a book. When you’re writing, you write the chapter, you forgot one detail, you go back and write it in or re-write the chapter. Have you ever thought, “I should have said…” or “I wish had mentioned…”? If you had it outlined prior to your presentation or in speaking to others it would have been so much better. The business plan is the focus for your entire business. It will show you how it affects your life, your family, etc…

What is it, what does it do and how do you do it?

* It gives you the chance to decide what your value is to other people. When you’re either selling a product or service, what’s the value proposition (what it’s usually referred to). How can a person use it and why is it a value to them? How will they perceive it?

* Marketing: How will you present it? How are people going to feel? How will they use it? Why would they need it? How will you develop a want and desire for your product?

* Producing the plan: How will you put it together? If you have products, how will you escalate all the different products, at different times? All that needs to be set out so that you have an idea of all that you’re planning. Also as you’re going along what happens if you get off target? We all have biases on our own things. Over time, it’s okay to change your mind but having that business plan narrated out or outlined, it gives you the opportunity to say, “Wait a minute, this is why I thought this in the first place. Do I have a real reason to make a change? Or is this a better alternative?” It holds you accountable not just for timing or finances and staffing but also for your reasoning.

One of the most important thing in a business plan is actually the end. You should treat every business as if it has a life that will end at some point and time. You may want to start a business and think of passing it down to your children or grandchildren, etc… it’s a lofty idea but treat it that has 7- 10 year lifespan – something reasonable. The reason for this is you don’t keep on investing without taking money out and putting it into funds for retirement, children’s education, or whatever you’re going to do. It keeps you more honest to run it as a true business.

On elevator speeches (I’m not a big fan of this) but you do need to be to talk easily to bankers, accountants or attorneys that you might have to deal with. Even more important, you need to be able to talk to people who might be interested on coming on board one way or another. That is really good talent to help you with your business. Whether it’s an actual employee or someone you can partner with. If you’re just saying things off the cuff, that does not sound solid enough for people to have the confidence in joining you.