No more business plans please!

[Vincent]

And the rebuttal...

...why do 9 out of 10 new businesses not succeed

I think most people go into business, not because they want to, but because they have to. They have an absolute need to generate income. Many are unable to find a job and the 'next best thing' is to start your own business. Short of all resources they put their head down, shoulder to the wheel and courageously challenge the insurmountable odds that face them. Thinks that legends are made of, but this is hardly the case for most people. People don't realise how difficult it is to start your own business.

...people list as one of the reasons their business failed at #1 No business plan.

Twenty-five too thirty years ago business plans were a foreign concept to most business owner. Having a business plan won't create a great business, and conversely having no business plan won't mean that a person won't succeed. I think most people would agree on this point - no need to labour on it any longer. The conventional business plan and mind set of how we perceive and comprehend this document need to change.

As Karl Albrecht said in his book, Corporate Radar, “The majority is not always right, conventional wisdom is not always wise, and the accepted doctrine could well be flawed. The more fashionable an idea, the more it is likely to be exempt from critical evaluation. Breakthrough thinking sometimes calls for contradicting the most widely held assumptions and beliefs.”

• Absolute passion for your product or service
• A passion for your customers
• The strong self esteem that people will describe as presence
• The ability to sell, not market, but sell. There is a difference!
• The ability to care about the financial well being of your business.
• The ability to built laterally on your business and expand it
• The ability to employ the right staff to make your business work

Couldn't agree with you more.

I would like to end this off with a quote from a good friend of mine, "The customer doesn't pay, persistence pays!"

Chatmaster thanks for the input.

[Chatmaster]

Vincent, I am far from the expert in entrepreneurship and one thing I appreciate about this forum and it's members is the constructive and sensible discussions that takes place here. I rate this discussion as a must read for any new business owner, because everyone says you need a business plan before you start your business, but there is no or little understanding of what it is. I think this topic offers a variety of views that can help people to realize what a business plan is truly about, but more than this I hope it helps you in your thesis.

I am not the model business owner and has had far more mishaps than successes when it comes to business.

Just a final opinion on your first post.

“The 20th Century business model - constructed around hierarchy and five-year business plans - won't work for the new millennium,” Kingsland, chairman of the Association of Business Psychologists (ABP) in the United Kingdom.

During the power failure today, I opened a book I bought 3 weeks ago for the first time. "Guerrilla Marketing". It is an old book that allot of people are familiar with. But it made me realize that a business plan that is planned for a 5 year period is a true waste of time. Marketing is to a large degree everything involved in a business and the core of a business success. With marketing moving away from the traditional marketing methods to a more technology type of marketing, things are moving way to fast to have a 5 year business plan.

[manie van niekerk]

Dont know where to get the meet and greet forum.

[wynn]

A 'business plan' is what you give to your bank manager, because he feels if you don't have one you are not serious.
It is effectively a waste of time unless you are kissing your bank managers @rs#.

Now a 'plan for business' is a better discription of what is useful, it would basically be something like this.

step 1) what can I do, sell, make, fix, advise etc? (DSMFA) that will make me money.
step 2) go to the other end, what do I need to earn each month to make this (DSMFA) viable?
If I need to earn say R20,000.ooPm I need 20 (DSMFA) @ R1,000.oo profit or a 1000 (DSMFA) @ R20.oo profit per month to survive.
step 3) list all the necessary steps to arrive at that figure working backwards.
So many per week, so many a day, so many every morning and so many every afternoon, to do this I must make so many widgets, calls, spend x time in the workshop and x time on admin etc.

If this is feasable and if it works for you the next step is
step 4) how do I fine tune this to make more profit? (not necessarily turnover but profit)
step 5) after you have wrung every drop of profit from your venture, move on to, how do I expand this without compromising the profitability? and when is the time to stop expanding and start another business or branch?

[Dave A]

Dont know where to get the meet and greet forum.

http://www.theforumsa.co.za/forums/forumdisplay.php?f=28

[Colleen Lewis]

I've attended some really bad business plan workshops and I've see too many inexperienced new entrepreneurs believe that they have a winning formula, just because someone has written a business plan for them. I have also recently heard that consultants affiliated to SEDA charge up to R17K for a business plan! Somehow we need to teach entrepreneurs that while the business plan is a useful framework that can guide your planning, the process of planning needs to be ongoing. You should regularly go back and adapt/refine your plan to suit current circumstances and analyse what lies ahead. Read my review of Allon Raiz's new book, "Lose the Business Plan".

[brown]

A business plan when you don't have a clear goal of what you want to achieve or you lack basic business knowledge is a waste of time. I used to be one of those SEDA/UYF service providers. What I couldn't understand was the objective of both. They claimed to have the interest of the SME's at heart, but who really benefits when an entrepreneur is looking for a start up of R10,000 but you throw away R15,000 into a service provider to just do a business plan. My business plans were so bad... I'd use templates based for the US market and use them in KIMBERLEY... Kimberley? You can't even compare it to Joburg. But I used to be so convincing to get the client to buy into my product, I would even accompany them to the banks for the loans and present their cases. Whilst I knew, they stood 0 chance of being funded. It was my job after-all to draw up as many business plans I could in any given month... A waste of money.

Then there was the UYF loans division. They could only consider your application if you had a Surety. I think both UYF and seda are really failing the sme's. And there's so mcu potential to do much more

[Colleen Lewis]

So I presume you have had a change of heart and are no longer ripping off the naive new entrepreneurs? Yes, there is so much that could be done. I daydream about a franchise model for start-up 'facilitators' who can take entrepreneurial support into their communities. Have you got any suggestions for what can be done or what government should be doing differently to give entrepreneurs the right support?

[Dazfuzz]

A prospective partner and I went through a the process of building a business plan for a potential purchase recently. I found that over the few intense days and nights it helped us to focus on the who's, how's and where's and set out our own level of involvement. It certainly helped us "clear the air" about our stakes as partners (or potential partners)

The plan has been temporarily shelved because the deal wasn't right for us at the time, which I think may have taken us further down the road before realizing; but the process did open our eyes to identifying better route for us to take.

As mentioned in earlier posts it turned out to be more of a planning for business exercise rather than just producing a business plan. This experience may not have merits for all entrepreneurs but putting all the facts down on paper, and honestly analyzing them is a definite must do.

[brown]

As mentioned in earlier posts it turned out to be more of a planning for business exercise rather than just producing a business plan. This experience may not have merits for all entrepreneurs but putting all the facts down on paper, and honestly analyzing them is a definite must do.

If only up and coming entrepreneurs were all about planning for business, rather than planning for making money.

Some people have great business ideas in theory but the lack of understanding of the market trends is a major downfall. That's where the SEDA's and UYF's should be focusing on. Teaching people about the markets and developing statistics in relevant areas so people can explore markets that are untainted if there's potential or expand the current trends by bringing in more creative and competitive strategies...

[Colleen Lewis]

Hear! Hear! And the old Umsobomvo Fund (now the NYDA) was the worst culprit in driving this approach, by handing out vouchers to their clients (youth aged 18-35 yrs) to go and have a business plan done by a 'consultant'. Then Umsobomvu could report that it had spent Rx million of taxpayers' money on 'supporting' y number of start-up entrepreneurs.

[Blesh]

One can understand why there is a need for some form of documentation supporting a request for funding. The problem with banks is that it quickly becomes a paper shuffling exercise exacerbated by the fact that often the individuals assessing the plan have minimal experience and go by the "numbers".
VC's tend to be more experienced and are more interested in the people behind the plan.
However, if you have not taken the time to put an assessment of your plan together with some projections and market assessments down on paper you are highly unlikely to get past first base.