The Death of the Traditional Business Plan is a MYTH!

Put your thoughts on paper before writing your business plan.

The death of the traditional business plan has been discussed over and over again. Writing a business plan is often cited as the first thing an entrepreneur must do before starting any new venture. However, a traditional business plan rarely (if ever) survives the reality of the market once the full document is completed.

So, do you really need to sit down and write a traditional business plan, or is it a waste of time?

This is the question. No doubt this probably isn’t as big as the Nature vs. Nurture debate, but… it’s very relevant to many small businesses and entrepreneurs.

What I mean by a ‘traditional business plan’ is the more detailed and much longer document that includes all the traditional sections that a business plan includes:

  • Executive Summary
  • Company Overview
  • Products and Services
  • Industry and Market
  • Plan of Operations
  • Financial Section
  • Appendix

Within each of these main sections there are usually a number of sub-sections that break down into more detail.

So, what is the case against writing a traditional business plan, and what is the case for writing a traditional business plan?

 

The Case Against the Traditional Business Plan

There are really big names out there; huge influencers like life coach guru Tony Robbins who say “Throw out your business plan.”

Robbins writes, “The pace of change in the professional world has accelerated to the point where a business plan is no longer enough to plot the future of your company with any certainty. Disruptive technologies or unexpected competitors can come along and displace your business overnight.”

…I totally agree with this. BUT, this mainly applies to technology startups that are entering a niche market.

The problem with many people writing a traditional business plan is that most small businesses and entrepreneurs want to use their business plan as a cookbook. They want to follow it step by step like a recipe in order to grow their business. However, because it’s such a fast-paced world, this simply doesn’t work. This is the point Tony Robbins is trying to make. Yet Robbins’ target market does not include the ‘Mom and Pop’ shops out there that need extra working capital to purchase new equipment, or add additional staff.

 

The Case For the Traditional Business Plan

There are still certain times when you must have an investor-ready business plan prepared.

A traditional business plan serves a specific purpose for a specific time and place. You can’t use your business plan as a cookbook. You have to realize that your business plan is a living document. It needs to be changed and enhanced continuously based on the business decisions you make.

If you’re seeking funding in any capacity, you will need some form of a business plan to present to investors and lenders. Here are the 3 situations where you will need to have a business plan written.

  1. Bank loan –

A traditional business plan is the foundation for your eventual funding and growth. Whether you’re seeking seed funding to launch or working capital to grow, an investor-ready business plan sets you up for success. When seeking a bank loan, your business plan must be unique to your specific business. It doesn’t have to be eye catching and flashy, but the content has to be your own. Let your lenders know why they should invest in your company, and in you.

In fact, the Small Business Administration (SBA) says directly on their website, “Before you start talking to lenders, have a look at the abbreviated checklist to see if you’re ready.”

And what the first item on that abbreviated checklist? “Business Plan.”

SBA Loan business plan

‘Business plan’ is the first item on the SBA’s checklist for obtaining a bank loan.

 

  1. Private investment –

This is a very similar situation to seeking a bank loan. Unless you’re seeking funding from friends and family, nearly every private investor or investment firm will ask for some sort of business plan.

In this situation your business plan can be scaled back a bit from a ‘traditional business plan’, but it still has to include the 3 integral pieces of information; the where, the what, and the how.

  • Where you are now, and where you want to go;
  • What you do, what industry you’re in, what your competitors are doing;
  • How you will grow within the market, and how you will make money.

 

  1. Initial Public Offering –

Again, if you’re going public you will need a business plan. The Securities and Exchange Commission (SEC) requires all companies to include a business plan within their registration documents.

There’s a strong chance that if you’re reading this article, you probably aren’t going public… yet. Once you get to that point, you’ll be working with a securities law firm that has business plan writers (like me) to make sure you’re adhering to all SEC rules and regulations. However, this is a situation where you will need a business plan, so I needed to include it.

Besides the fact that writing a traditional business plan is required in many situations, the whole business plan writing process helps you discover valuable information to help you succeed. Even if you’re not seeking funding, writing an investor-ready business plan as an internal roadmap can provide huge benefits to your business. You’ll discover what competitors are doing, and find holes in the market that need to be filled. This leads you towards a better definition of your ideal customers, and in turn, a better sales and marketing strategy.

All that said, don’t prioritize planning over doing. If your business plan is for your eyes only (an internal roadmap), make sure you’re focusing on the Plan of Operations by actually DOING. Create milestones and goals, and then continuously edit your plan based on your decisions.

Cheers to success!

 

Reach Out If You Need Help

As always, you can always reach out for free resources to get you unstuck and eliminate the business plan writing overwhelm.

I’m super accessible, so reach out with any questions you have. If you’ve ever received an email from me, you’ll see that I include my email address, phone number, skype ID, and Calendly calendar… so reach out in whatever way is easiest for you.

You can even instant message me in the bottom right corner of my website (https://petekremer.com), or use Facebook Messenger to message Pete Kremer Page (https://facebook.com/petekremerpage)

Some other helpful resources:

You Make Your Business Plan Unique (ebook)

Business Plan Structure – 6 Must Have Sections

petekremerThe Death of the Traditional Business Plan is a MYTH!
read more

Business Plan Writing Secrets Hiding In Your Own Head

Start writing a business plan now

Yes, there are some business plan writing secrets hidden in your own head. Let me delve into a couple secrets that will help certainly help you if you’re at a stand still.

In my years as a business plan writer I have come across thousands of people in the process of writing their own business plan. In fact, go to Freelancer.com, UpWork.com, Fiverr.com, or any other freelancing platform, and you’ll find hundreds of job posts per day for ‘business plan’.

But it’s funny really…

You’re passionate about your company, new venture, or new idea. Ideas are pouring into your head – product offerings, product features, product tweaks, customer base, marketing techniques, sales pitches, partnerships, global growth, and on, and on. You can’t wait to dive into the deep end and start planning for world domination (maybe an exaggeration).

But for some reason when it comes time to sit down and put the pen to the paper, the business plan never gets done.

Why is that?

Often times a business plan never gets written because you focus on creating the business itself. Writing a business plan takes a back seat to actually making sales and growing your company. In this scenario you rarely even need a traditional business plan, which is quite lucky for you.

However, if you need funding to get you idea off the ground, or to grow your company to the next level, you will need a detailed business plan. For far too many individuals and small businesses a business plan never gets written because of overwhelm. You get stuck thinking about all the possibilities, and can never focus and define one clear path. Your endless ideas and the intrigue of ‘what ifs’ create this overwhelm.

So, how do you focus?

The answer lies within the great Bill Murray and Richard Dreyfuss movie ‘What About Bob?’

“BABY STEPS”

Baby Steps – Business Plan Writing

Baby Step #1 for Starting Your Business Plan:

Start Your Business Plan with the Secrets Hiding In Your Own Head

To start the business plan writing process, write about now. Describe where you are right now with your company, new venture, or idea. It doesn’t matter if it’s just an idea that’s barely on paper. Only you know where you’re at right now, and you have to describe it in your business plan anyway… so start there.

Here’s start: “As of [insert date], [insert company name or working title] exists as a development stage company that…[describe what you do now].”

It’s far easier to describe the facts than creatively word the prospective future. So, just start writing the facts about where you are now, and this will give you a baseline for where you want to be.

Baby Step #2 for Starting Your Business Plan:

Write About The Parts That You Are Passionate About.

Once you have established the baseline of ‘where you are now’, dive into the section(s) of your business plan that get you excited. What parts of the business get you excited?

If you’re super passionate about the crazy awesome product features that you want to build out, then dive into writing the Products and Services section.

Or, if you can wait to discuss the ingenious marketing ideas you have in order to gain traction, start writing your Sales and Marketing Section.

You get my point – just write down all the ideas in your head.

Once you’ve written about your current status and the sections that you’re passionate about, you may start quoting ‘What About Bob?’…

“I feel good, I feel great, I feel wonderful.”

What About Bob? - I feel good. I feel great. I feel wonderful.

Reach Out If You Need Help

As always, you can always reach out for free resources to get you unstuck and eliminate the business plan writing overwhelm.

I’m super accessible, so reach out with any questions you have. If you’ve ever received an email from me, you’ll see that I include my email address, phone number, skype ID, and Calendly calendar… so reach out in whatever way is easiest for you.

You can even instant message me in the bottom right corner of my website (https://petekremer.com), or use Facebook Messenger to message Pete Kremer Page (https://facebook.com/petekremerpage)

Some other helpful resources:

You Make Your Business Plan Unique (ebook)

Business Plan Structure – 6 Must Have Sections

petekremerBusiness Plan Writing Secrets Hiding In Your Own Head
read more