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Thread: Lose the Business Plan

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    Lose the Business Plan

    Success is about the entrepreneur, not the business plan

    Financiers are getting it wrong, says Allon Raiz: the business plan should not be the primary consideration when deciding to lend money to a small business.

    This is the fundamental premise of Raiz’s new book, Lose the Business Plan: What they don’t teach you about being an entrepreneur, which hit our bookshelves in September. The book aims to stimulate a debate around the validity of the business plan as a means of predicting business success. In it, Raiz expounds on his long held belief that the qualities of the entrepreneur should be foremost in the decision about whether to finance his business.

    This is not to say that Raiz dismisses the value of the business plan. However, he places far more value on the process of thinking about the plan, because, he says, the likelihood of a plan being followed to the letter after it has been conceived is very slim. In entrepreneurship, circumstances can change so rapidly, sometimes daily, that the entrepreneur has to be able to rethink his plan and implement new actions all the time. When you run a business, you will not survive if you are not flexible and able to adapt quickly.

    The book reflects the thinking behind the methodology that Raiz has developed in his company, Raizcorp, where entrepreneurs are so successfully guided towards growth and profitability. Somewhat controversially, some believe, Raizcorp screens all its applicants, does not ask them to submit a business plan, and only accepts those who show the potential it is looking for.

    The focus of Lose the Business Plan is on small businesses that want to be geared for growth. The self-employed, one-man-band is not a true entrepreneur, Raiz argues. His own vision is to drive businesses that can grow, create jobs and replicate productivity. And to achieve this the entrepreneur needs to develop soft skills, such as pragmatic thinking, attitude, desire, vision, self-discipline, focus, belief in yourself, resourcefulness and seeing opportunity. Raiz unpacks all of these in clear, fresh and engaging language and tells many anecdotes by way of example. At the same time he cautions his readers to have a firm grasp of reality. He is very clear about the difference between delusion and vision and sobering pitfalls and realities are examined.

    Would-be entrepreneurs who believe that a good business plan is a recipe for success need to read this book urgently. And if they identify strongly with what Raiz has to say and his book leaves them itching to proceed with thinking and taking action, then they can be reasonably confident that they’ve got what it takes to be successful.

    For financiers, the need to read this book is just as urgent. Here they will find the questions they should be asking the applicant who comes to them for funding. The decision should never be left to an anonymous finance department, Raiz says, where ‘yes’ or ‘no’ depends on the accuracy of the financial projections and how neat and tidy the plan is. Lose the Business Plan will inspire a different paradigm, where the final decision is about the person, not the plan.

    Lose the Business Plan, by Allon Raiz, is published by Bookstorm and Macmillan, and is available at all leading bookstores for R143.

  2. Thank given for this post:

    Chatmaster (01-Nov-10), Dave A (01-Nov-10)

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    I am going to be very entrepreneurial and start a 'business plan writing business'
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    An interesting point came up during a discussion this morning and that is that the business plan should suit the size of the business. The plan should be revised anually based on performance. Small business should grow organically rather than by cloning.

    Entreprenuers are told, and seem to think that one takes an idea, writes a business plan, toss money at it and you have a business - it doesn't work that way. If you are a one man band and you go to a bank with a grand scheme to lend R10 million to start a business they sure won't lend you the money. But if you go to the bank with a plan for the next year with reasonable growth based on your realistic abilities you have a better chance.

    Entreprenuers are told to think big, dream big and plan accordingly. This might be good in the greater scheme of things but it doesn't work when you plan your annual growth. Imagine you have a great idea for an airline and all you own is a Cessna 150 - buying an Airbus A380 isn't the way to go.

    Yes there are the guys that made $700 million dollars, but the average guy first has to learn to make a living and a little profit and then to grow organically and exponentially, if he is lucky.

    Way too much emphasis is put on the grand plan that will make a fortune make a fortune.
    How easily someone is offended is directly proportional to how stupid they are.
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