Benjamin Franklin once advised, “If you fail to plan, you are planning to fail”. There is no time this rings more true than when going into business.
With all the legal, technical, and financial puzzle pieces fitting together; all the office politics, and dissolved partnerships; a business is the last journey you should embark on without a solid plan.
If you need more convincing, then consider that a business plan isn’t just for writing and sticking in a desk. You will encounter professionals on your business journey who need to see that plan, even if they never read the whole thing.
Here are the five people your business plan is really meant for.
1. Business Coach
It’s increasingly common for entrepreneurs to work with business coaches, mentors, and advisers. These are often former businessmen and women, who have had their moment in the limelight and want to pass the torch to a new and younger flame.
Once you go through the ordeal of securing professional advice, one of the first documents they will ask you for is a business plan. Some may not ask for the written document, but they will need the information the document covers.
Questions you can expect to hear, include:
- What is your niche?
- Who is your target market?
- What’s your marketing plan to reach your market?
- Have you secured any investments?
- How do ensure your return on investment? Including money and time.
- How much experience do you have in this field?
- Have you ever owned or managed a business before?
Know that no matter how long you’ve been in business, if you decide to work with a professional adviser, you will never be “too established” to avoid interrogation.
I was in my 11th year of business when I first contacted our Key Adviser, Randi Minetor. She asked me every last one of these questions – and then some.
Time is valuable. Professionals need a good reason to spend theirs on you.
When it comes to interrogations, perhaps no one will ask you as many difficult questions as potential investors. If you plan to get a loan from a bank, then an airtight document is a must.
Keep in mind that banks and other investors take risks, but only calculated risks. These risks are based on numbers and figures and facts, not suppositions. Investors will want to know:
- Is this business feasible? How do you know?
- Have you secured any other capital, or investments?
- What is your financial situation like? Can you and the business afford a loan?
- What is the price of your goods and services?
- How much money has your business made so far?
- How much money can it make in a year, three, and five?
- How soon can we expect to receive a return on investment?
- If this is a risky venture, have you evaluated the risk? What are the methods you will take to mitigate risk?
- If you default on this loan, what are you willing to provide as collateral?
Investors will need the full document for their records. In addition to this, prepare a brief presentation with a summary of the business plan for the investors to flip through on the day of your pitch.
The main reason investors will want to see your business plan, even if they never read the whole thing, is to confirm that you have actually done your research and thought the whole process through.
There is no business idea as risky as the one developed on a whim.
3. Business Partner
James H. Krefft of the Partnership Continuum estimates that 80 percent of all business partnerships fail. Yes, your business partnership is less likely to work out than most marriages in America.
One of the main reasons this happens is that partners don’t plan for a business. This leads to disputes over leadership, functions, finances, and the direction the business should go in.
Business plans should be written together in a partnership. If a new partner joins, it’s in the best interest of the business to share the business plan and make all necessary adjustments. A wise partner will want to know:
- What is my title and role?
- What are my functions?
- How much money, time, and additional resources will I need to invest?
- What will my compensation be?
- Will there be a conflict of interest with my other business, or day job?
- Have you secured any outside investment?
- What happens if I choose to leave the partnership?
In other words, if you’re going into a partnership, your business plan is the prenup that could save your union. And always remember to followup a business plan with an iron contract that both parties can agree on.
4. PR Firm
It should come as no surprise that your public relations firm will want to see your business plan, as well. As agents of your business and brand, we are the executing arm of your will.
To fully understand that “will” we need a business plan. Otherwise, our initiatives on your behalf may sometimes be disjointed from the image you want to portray.
Business plans let us know where you’ve been and where you want to go. We need to know:
- Who are they key personnel in your company? What is their contact information?
- What is your monthly budget?
- What are your products and services?
- What are the brand’s core values?
- What are the most important goals for your brand?
- Do you have a website or social media accounts? What are the links to these?
- Is the company involved in any goodwill strategies?
- Are there any causes the company supports? Any beliefs or practices it is strictly against?
It’s important to have this information before we build your websites, do your website copy, write blog posts, send out newsletters, seek advertising placements, and connect with gateways to the media on your behalf.
Even the best PR efforts will land a brand in trouble, if they are not in line with the core values.
5. The Dream Team
Outside of the first four people, no one else needs to see the actual copy of your business plan. In fact, wise companies know better than to give unauthorized people access to their plan.
The reason is obvious. If your competitors get a hold of your business plan, they can out-plot you for years to come.
However, as new workers come in to make up your dream team, they will need to receive information that should come from the business plan. Some of the things your dream team will need to know are:
- What is the organizational structure like? What is the chain of command?
- Who do I report to, and who reports to me?
- What are the roles and functions associated with my title?
- What is my compensation?
- What company goals is my department or role specifically contributing to?
- What is the company’s code of ethics?
- What is the company’s stance on diversity issues, politics, media relations etc.?
Sharing this information is not just beneficial to the worker, but to the company as well. Workers can only meet your expectations, if you tell them what those are.
An understanding of company goals and ethics also ensures the actions workers take on the brands’ behalf, reflect the brand’s core values.
Are you an entrepreneur with a business idea you would like to flesh out on paper before execution? Then you’re a wise one. All it takes to get started is one email.
We look forward to hearing from you soon!