Since High School, I’ve always heard that business plans were the first step in creating a business. All of my business and entrepreneurship classes only stressed three steps when starting a business: 1) think of the business, 2) write the business plan and 3) start the business. When I became a real entrepreneur, I realized how completely disjointed and detached this thought process is. As the co-founder and CEO of Detroit Dough, I’ve written my fair share of business plans that set the foundation for our growth and the vast amount of funding we’ve received throughout the years. As great as our plans were, I found that they often times took a backseat to the changes and instinctual decisions we made to keep our business thriving.
Let me tell you a secret – there is no fool proof way to start a business. This means there is no amount of planning you can do to make your business successful. Success comes from truly doing the work. Finding that perfect balance of working in and on your business and being agile to the expected changes in entrepreneurship.
So if you can’t “plan” your way to success, why are business plans so important? For me, I’ve found that business plans are key for three things:
1. Funding – If you’re interested in getting any type of funding (loans, grants, VC funding, etc.), those entities will often times ask for a business plan or executive summary.
2. Financial Forecasting – It is so important to have a high-level understanding of your projected start-up costs and 3-5 year projections. Business plans force you to think though this element which makes you more prepared to meet and exceed sales goals.
3. General Business Understanding – Let’s be honest here – a lot of business owners can’t eloquently talk about the details of their business and often times it’s because they paid to have someone write their business plan or never did one. Taking the time to work through your business plan gives you a deep knowledge of your industry which is invaluable when it’s time to network, sell your products/services or pitch.
Outside of this unfortunately there’s no real benefit to business plans. I know - it kind of feels like we’ve just revealed the wizard in the Wizard of Oz. This is why some businesses opt for shorter or more impactful plans like executive summaries or strategic plans. Often times these provide the right amount of strategy planning to get a business going.
But here’s the catch – when you need a business plan you absolutely need a business plan. There’s no way to get around it. If you’re applying for a loan or grant or if someone requires a business plan to work with you, you have to provide the full 10-12 page plan. It sucks, right? If they don’t matter, why do they still matter? I completely feel your pain!
Here’s my honest advice for you – the process of writing your business plan provides way more value than the business plan itself. If you don’t feel like you’re not at the point to write your business plan, its absolutely okay start selling without one. But when you are ready, WRITE IT YOURSELF. Do the research, confront those questions and power through that business plan! When you take the time to learn about your business at this level of detail, you set yourself up to be prepared to do the work in your business and as mentioned, this is the only real indicator of success.
Quick shameless plug – Proxie will be launching a business plan course called Proxie Launch that walks you through your own business plan writing journey in less than a month! You get detailed in-person classes, worksheets and a community to help you develop a professional-level business plan. Also, you’ll get detailed finances and an executive summary which is key for taking your business to the next level. And guess what - it costs less than two college credits. If you’re interested, join our email list to get first access. There’s limited slots available and I want to make sure you’re there.
In conclusion, business plans are no longer the catch-all that they used to be. However, they are the ticket that can get you into the door. As long as you put in the work on your own to develop your own understanding of your business you are on the right track.