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#463: Apparently You Don't Need a Business Plan

Posted By Mark Haas CMC FIMC, Wednesday, December 22, 2010
Updated: Wednesday, December 22, 2010
My consulting practice is focused on strategic planning and financing for startups and major growth initiatives. Given reluctance to invest except for low risk and high return (I get that), what can make our plans stand out from others?

Pick up fifty management books and you'll find fifty different opinions about what should go into a business plan. Even looking at business plan software packages that have "distilled the best practices in planning" and you'll find they vary considerably. The best advice is to balance two things: what you need to understand the business and what the lender, investor, vendor, partner, or other person who you need for your business to grow.

As far as what you need to understand your business, less is more. Your plan should be clear, concise, and coherent and that could be as little as a page or two. Given the rate of change and volatility in technology, economy and politics, it is unclear of the value of 5 or 10-year projections in mind-numbing detail. If you (or your clients) can't sum it up in a page or two, then you probably don't know your business.

As far as your business partner, lender, etc. is concerned, they don’t want to read a big plan. Would you? If the idea is not compelling, then no plan will induce them to invest. When Samuel L. Jackson was asked to read the script to "Snakes on a Plane,” he refused after only hearing the title, saying something to the effect, "Snakes on a Plane? I don’t even need to read it. Count me in!” That’s your business plan for others.

Tip: Recent research at Babson College showed that business plans are not what they used to be, and . Specifically, planning is useful but plans, especially telephone-book sized ones, are not. Few lenders look at them and few owners ever use them to run their business. Better to spend time making sure the idea sells itself rather than hoping an elaborate plan will.

© 2010 Institute of Management Consultants USA

Tags:  planning  presentations  product development 

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