You Always Feel Better When You Finish
Hi all! Ted Stearns here with another post following up on last week when I posted about developing your business plan. Anyone who reads through my posts regularly will notice a pattern, and I hope you take it in the positive spirit in which it is intended. Quite simply, I will be posting about a limited range of interrelated topics, such as writing a business plan.
Time to time I will branch out into something that I think is important to mention. But really, the most important things are the set of basics that make the difference between success and failure.
These are things that are easy enough until you try to clear time on your calendar; the things that take focus and energy can be hard to do and sitting down to write a business plan can be tortuous for entrepreneurs, getting us to sit for hours on end is an activity at the opposite of our core.
Naturally, we entrepreneurs like to wing-it. For us, we feel that since we are running the ship, and all the plans and know-how’s are in our heads, why must we spend the time to put it down on paper?
Yet, developing a business plan is one of the most important exercises a business owner can do; it forces us to think thru the minefields before stepping on a landmine. Here are some tips, this is not meant to be a step-by-step “how-to”, but it should serve a catalyst to encourage you to take a pen to paper and draft up a plan.
Do Not Put It Off
Most business owners will only start to draft up a plan only when the bank or investors have asked for one. If you wait until then, chances are you’ve shown the investors that you are not fully prepared to accept their money and that you are not serious about your venture.
The Master Cash Flow
Cash flows are one of the most important components to the plan and they can be the most time consuming. Your Excel skills may be dismal and it may have been eons since you’ve taken an accounting class, but lacking the expertise to develop a cash flow isn’t a reason not to do it, that actually means you need a cash flow even that much more.
Here’s a tip; place a project on Guru.com; there are plenty of talented freelancers on Guru who can help you develop your cash flow for a few hundred dollars. Years ago I met a phenomenal freelancer on Guru; she has her BA from Harvard and went to business school at Stanford. Over the years she has developed many of cash flows for me and during that time she’s saved me plenty of heartaches.
Your projections have to be conservative in order for you to defend them. As my father would say, “take your projections, cut them in half, and then cut them in half again, then again”. There is much truth in that. The projections must be conservative in order for you to defend them.
Chances are your idea and vision will not sell investors. Investors invest in people, not ideas. You and your team will. Who do you have on your team? Think about developing a high caliber Board of Directors who can stand behind your idea, who love startups and who can open their network of contacts to you.
It’s Not As Bad As You Think
Really, creating a business plan is not as hard as you think; it doesn’t have to be a doctoral thesis or a novel. Many books have been written to help guide you through the process of writing a business plan and software programs will lead you step-by-step (check out Business Plan Pro).
Avoid Fluffy Vague Goals
Leave out hyperbole and hype about being the best. The business plan isn’t meant to be subjective. Keep in mind; the objective of your plan is to point out specific dates, management roles and responsibilities, budgets and milestones.
Creating a business plan is similar to running, I can’t say that I thoroughly enjoy running, although I run or workout almost every day, I do it because I love how it makes me feel when I am finished. I have always felt better after a run, and you will feel better after writing a business plan.