A Business Plan as defined by Business Link contains the following: -
- An executive summary - this is an overview of the business you want to start. .
- A short description of the business opportunity - who you are, what you plan to sell or offer, why and to whom.
- Your marketing and sales strategy - why you think people will buy what you want to sell and how you plan to sell to them.
- Your management team and personnel - your credentials and the people you plan to recruit to work with you.
- Your operations - your premises, production facilities, your management information systems and IT.
- Financial forecasts - this section translates everything you have said in the previous sections into numbers.
This is a good practice but many entrepreneurs will tell you that business planning is a powerful tool for evaluating the feasibility of business ventures. However I’m also reminded of a proverb that says “He who fails to plan, plans to fail” but if you’ve ever prepared and launched a business then you’ll know that when you start looking at sales you can easily be too optimistic or underestimate the costs involved in running the business which can have a detrimental affect, resulting in little or no profit at best or business failure at worst.
So no matter how many times you write that business plan or forecast those sales, it’s very rare that you get the figures right so managing a business then revolves around making adjustments to the books by either increasing sales or reducing costs or both.
One thing that wasn’t available to me at college was the social community, the principle of doing research existed but access to sales, customers and opinion was not possible without hard graft of doing the physical market research. If you got that wrong then you’d only discover this after the business started and only after incurring excessive costs.
Today with social media your research is available for free through your various social networks, you can get access people opinions and you can establish whether your business or products have demand.
Utilising the social networks enables you to fail faster allowing you to make changes to products and services quickly and tapping into the sentiment of your customers and thus make changes. In the worst case, if you can’t meet the expectations of your customers then the business will close but at least you can close faster and incur less costs.
I also remember a phrase from 1987 film Wall Street ‘Greed is Good’ the modern 2010 film Wall Street: Money Never Sleeps ‘Is Greed Good?’ the strap line in my fictional 2012 film Wall Street it would be ‘ Fail Faster to Succeed’