Do the Business Plan First!

I'm constantly amazed by how many entrepreneurs just jump in and start spending money on websites, marketing, etc., without having first accomplished their homework. Then after several months and maxed-out credit cards, they turn to someone like myself to help them understand why they are not getting any leads or generating any business. In almost every case, these fledgling millionaires failed to complete a business plan before leaping into the unforgiving world of commerce.

A business plan forces one to apply logic and rationale to "bright ideas." Done right, it highlights the risks, tests assumptions, helps to identify winning strategies (if there is one), and presents the expected return on investment in cold hard numbers for different scenarios.

Completing a business plan before launching a business will not guarantee success, but it will give you a much better chance of succeeding. Rushing to market without a business plan almost always results in expensive surprises and ultimate failure.

Having a business plan provides a targeted roadmap and benchmarks against which progress can be measured. It also alerts you to "bailout" opportunities if things are not going as expected. And it will help you to avoid costly pitfalls. In short, preparing a rigorous business plan upfront will more than pay for itself.

Business Plan Sanity Check

For a small business or start-up, getting a "sanity check" for your business plan from an experienced consultant can mean the difference between success and failure. The small expense of having an experienced person review your business plan (or simply your strategy, whether it's written down or not) is more than recovered by the insights gained and the avoidance of costly pitfalls.

And for those of you who do not have a written plan that has been scrutinized by someone who is "business knowledgeable," recognize that you are winging it! Are your goals realistic? Are they achievable? Are they even the right goals for your business? And do you have realistic action plans to achieve your goals? Are you leveraging your strengths while minimizing your weaknesses? If you don't know the answers to questions like these, you may already be headed for serious trouble.

Too often, start-ups and small businesses don't even see trouble coming until it is too late to do something about it. That's the purpose of a well-thought-out business plan - to look ahead and increase your odds of success by avoiding likely speed bumps. The failure rate of businesses who don't take the time to think through their objectives and strategies is dramatically higher than those who accomplish this upfront and perform at least annual reviews.

Without a roadmap for your business, how will you know if you're going in the right direction? If you don't have the experience, aptitude or skills to prepare a business plan, then employ a knowledgeable consultant to help you put one together. It will be the best money you ever spend.