a biz plan is a written document that gives in detail everything about the new venture, product, industry, market, money, technology, people, growth, risks, returns. in other words, the entire story. as the entrepreneur sees it. in effect it is the entrepreneur's canvas and how he paints it as he visualises it. it is the most personal statement an entrepreneur can make.
the biz plan serves two purposes. one, in documenting his vision, the entrepreneur is actually ironing out inconsistencies, flagging problem areas, pre-empting road blocks, introspecting into his own competencies and skill sets, laying the cards on the table with respect to resources, re-visiting his own commitment levels, and communicating his conviction.
the second equally important purpose that a biz plan serves is, as a road map, once the biz kicks off.it is an excellent reference scorecard for the entrepreneur to keep going back to, to see whether the biz is on track as planned or has veered off track. the danger is not just in under-performance vis-a-vis the biz plan. it is equally dangerous to be caught in the throes of unplanned growth because it is only a matter of time before the biz starts floundering in the absence of processes and systems that have not kept pace with the growth. most entrepreneurs have a bad habit of convincing themselves that their company is too small right now and once the company grows, they will put systems in place. what they dont realise is that, that itself becomes a show-stopper for growth.
any which way you look at it, an entrepreneur cannot embark on his entrepreneurial journey without a biz plan.
i have known a number of entrepreneurs who say that they have a damn good concept and therefore they dont need the biz plan. my young friend ashish singh says 'i dont have a biz plan, i have just developed a site' !
i have known people who say: i am not borrowing money from anyone, i have invested my own earnings, so why do i need a biz plan.
i would say all the more reason, my friend, you need the biz plan as you dont want to lose your hard-earned earnings without one!
a friend of mine, vaidi almost got upset with me yesterday when i asked him if he has ever made a biz plan. he has been in biz for a decade now and is still plagued by all the problems that start-ups usually have to contend with. i was genuinely curious to know if he had put together a biz plan, because to my thinking, if he had, he should not have had so many problems in the first place!
the biz plan is known variously, depending on the context it is prepared for. if it is meant for funding purposes, it is called a project report, a loan proposal or an investment prospectus.
the biz plan document is a tool that makes the otherwise arduos entrepreneurial journey a little less hazardous, a little more predictable, a little less prone to luck and other inexplicable elements and a little more prone to activity-oriented result and result-oriented activity. it certainly does not eliminate all the vagaries of the market place. but it sure does give the entrepreneur a distinct upper hand in being better prepared for them.
the best prepared biz plans may mean nothing if the typical pitfalls are not avoided. the pitfalls are, unrealistic projection of sales and growth, unreasonable time frame in expectation of return,
sub-optimal resource utilization, lack of commitment on the part of the entrepreneur, no sense in mile-stoning, no market niche, no internalising of the basic concept and methodology of biz.
in my next blog, we will see what are the various components of the biz plan.
a small detour - ok i really should continue with my second life story, but i want to mull over something i heard today. a young entrepreneur came to see me and every two s...
7 years ago