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Thread: No more business plans please!

  1. #11
    Silver Member Vincent's Avatar
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    An update:
    This post was originally intented to help me on a book that I wanted to write about "Why business plans don't work, What is the alternative?" (working title).
    I have suspended this project for the time being, because I have provisionally been accepted to write my doctoral (DBL) thesis. I first have to complete two subjects, "Business Research and Managing and Resolving Employment Relations," with 65% pass and I will be accepted. When I submitted my application, I had to motive my application and part of my motivation was on my intended thesis, "Why business plans don't work..." So. to write a book on the same subject might jeopardise my thesis.

    This won't stop me from working on my other book,which I would like to have complete by the end of March. Contributions are still welcome.

    Will keep you posted.
    Vincent Marino
    Maximising the sales value of your business!

    Business 24-Seven |MyBlog Twitter |facebook |Phat feesh & chips






  2. #12
    Site Caretaker Dave A's Avatar
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    We have a doctor in the making! Good on you, Vincent.

  3. #13
    Platinum Member Chatmaster's Avatar
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    Quote Originally Posted by Dave A View Post
    We have a doctor in the making! Good on you, Vincent.
    Congratulation Vincent, I wish you all the best in this venture.

    I would like to add something to the topic though.

    I have never done a personal business plan for any financial institutions in my entire life. I simply do not believe in banks as the solution to any problems and simply cannot see how anyone can see them as a solution if they simply cause you to go deeper into financial trouble by extending the obvious. Given they have probably helped allot of businesses but I am definitely not keen on asking them for help in any of my businesses when the time comes. But I am a strong supporter of a business plan and feasibility study before starting your business.

    The first time I started a business it was because I had to. Finding a new job would take time and I needed to generate revenue to keep the pot cooking. I had no reserves and no job, so no financial institution would be willing to help me. I had to sit and plan what my options was because giving up simply wasn't one of them. Basically my list contained certain steps that took me from my current limitations, current income needs, personal limitations and personal benefits to what my knowledge and experience limited me to. Never once was the question, what I wanted to do and what I liked to do one in my initial planning. Simply because the urgency outweighed any of my personal needs. Startup capital wasn't part of this project either but I had to set certain financial targets and multiply them by 2 to ensure that I reached my targets. A further requirement was to stick to the only investment I could make at that stage, which was time.

    I set up a list of possibilities and started investigating competitors in these industries. I set up appointments and went to interview them as a future client and made solid notes about their services and products to ensure I understood what they offered. I then planned around these results and Highlighted what I could utilize from these different competitors and improve on and or merge to ensure the uniqueness of my own product.

    The end of the day I had a complete business plan which resulted in me knowing exactly where I was going and what i needed to do to accomplish it. My biggest mistake happened when I deviated from the original plan and involved a partner with hidden motives. That is besides the point but lets just say, I avoid partnerships as far as possible for the future...

    My current business ventures are all thoroughly planned and without a proper business plan I am convinced that they will not succeed.

    I want to mention another very important point that imho is worth mentioning. There are many factors to result in a successful business. A solid business plan is not a requirement for a business to succeed because there are examples of businesses that excelled and became successful despite not having a business plan. These factors have to include psychology as well. If an individual is motivated and has a strong self esteem they can accomplish the unthinkable and even exceed their own expectations without a solid business plan. They have a natural quality and presence that cause people to want to deal with them. However, very few entrepreneurs poses the qualities and it can be hard work for some people to actually make a business work. Motivation and self esteem should truly be part of the foundation of any entrepreneur and it is definitely not a natural element for most people.

    I highly recommend you to read "Will it fly" by Thomas K Mcknight and The World is flat by Thomas L Friedman. These books should be required reading for any new entrepreneur or business owner.
    Last edited by Chatmaster; 08-Jan-08 at 05:16 PM.
    Roelof Vermeulen (Entrepreneurship in large organizations)
    Roelof Vermeulen| Rock flaps south africa

  4. #14
    Silver Member Vincent's Avatar
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    The end of the day I had a complete business plan which resulted in me knowing exactly where I was going and what i needed to do to accomplish it... My current business ventures are all thoroughly planned and without a proper business plan I am convinced that they will not succeed.
    I believe you epitomise what Dwight D. Eisenhower once said, “Plans are nothing; planning is everything.”
    He was not suggesting that plans are worthless. Simply, he was implying the process of planning—where one considers the opportunities presented and the challenges confronted and ways to meet them—that is of more importance. And reading what you have written about your business, I believe this to be true.

    Writing out a business plan won’t necessarily help a businessperson achieve their dream. Napoleon Hill, in his popular book, Think and Grow Rich, had it right. "The starting point of all achievement is desire. Keep this constantly in mind. Weak desires bring weak results, just as a small amount of fire makes a small amount of heat."

    Many well known SA businesses that started never had a business plan. They had a thought, an idea, a belief that their product or service would succeed in the marketplace. They had desire, passion and dedication to achieving their goals.

    Flight hand Cleaner
    was developed by Mervyn Niland and his wife Beryl in their backyard in Benoni, with a broomstick and a 5-gallon drum. Today millions of people around the world are cleaning the grease and grime off their hands with Flight Hand Cleaner. This product now has a multimillion-dollar value.

    Other South African companies and products that originally never had a business plan include Kreepy Krauly, Pratley’s Putty, the Cat Scan, are just a few of many inventions born and developed in South Africa that never had a 'business plan.'

    There are 5 key reasons why business plans don't work
    1. They are not always a pragmatic view of what can really be achieved
    2. They are not followed up with consistent action
    3. They are not updated and reviewed
    4. Applying one-dimensional thinking to a non-linear situation.
    5. Practising long-term strategies during rampant change
    As previously stated there will always be advocators and detractors of business plans.
    Last edited by Vincent; 10-Jan-08 at 05:59 PM.
    Vincent Marino
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  5. #15
    Platinum Member Chatmaster's Avatar
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    Nice post Vincent, but I feel the urge for a counter view once again

    I do not know the exact statistics, but why do 9 out of 10 new businesses not succeed?

    My list include the following. (Please feel free to add to the list )
    • Shortage of funds
    • Lack of solid goals
    • Poor product or service
    • Incorrect marketing or no marketing techniques
    • Not paying attention to cash flow
    • Poor management
    • Not understanding the industry you are in
    • Lack of unique offerings
    • Under estimating competition

    I often find that people list as one of the reasons their business failed at #1 No business plan. I think it is because the origin of a business plan is either many years old, or simply done by people that has never owned a business in their entire life. I say that if you had a proper business plan, none of the above points would apply to why the business did not succeed. You increase your chances 10 fold if you have a solid business plan.

    Who starts their own business? What takes a person so far that they start their own business? Most new business owners worked as an employee somewhere and never had the opportunity to run a business. Perhaps they were a low level manager and decided that they can do this, or maybe they have retired after 35 years of service. But they have never run an entire business for themselves. What is the natural process if you are used to earn a comfortable salary every month?

    Why do people start their own business?
    • You hear about this great opportunity to start your own business.
    • I want to work for my self
    • I want to have free time to do what I always wanted
    • I want to be rich
    • I want control over my own destiny
    • I've reached the sealing in my current job
    • I need a new challenge
    • I am unhappy in my current job
    • My current employer is doing things all wrong


    What do people say when you ask them how they feel about their new business?
    They are scared
    They are afraid they will fail

    Even if this is not the answer they give you most of them will feel this but they might not admit it.

    If you feel the above applies to you, DO NOT START YOUR BUSINESS, because you will lack the real qualities that will make it work.
    • 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


    I always love listening to successful business owners when they explain how they started their business. But the obvious is not what made the business a success, it is the underlying factors, that nobody notices that made it a success.

    My point is this. How people define a business plan, is as dsd pointed out, a stupid dream and thumb sucking document to make the bank give them money, that is not a business plan. If you created a real business plan, none of the points I mentioned at reasons why it fails would have applied, simply because you would have known all there is to know and be able to prepare for it. Would you be afraid or scared? No, because you have clarified it to yourself, so you could start your new business with a passion, strong self esteem and prepared.
    Roelof Vermeulen (Entrepreneurship in large organizations)
    Roelof Vermeulen| Rock flaps south africa

  6. #16
    Silver Member Vincent's Avatar
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    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.
    Vincent Marino
    Maximising the sales value of your business!

    Business 24-Seven |MyBlog Twitter |facebook |Phat feesh & chips






  7. #17
    Platinum Member Chatmaster's Avatar
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    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.
    Roelof Vermeulen (Entrepreneurship in large organizations)
    Roelof Vermeulen| Rock flaps south africa

  8. #18
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    Dont know where to get the meet and greet forum.

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    Diamond Member wynn's Avatar
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    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?

    "Nobody who has succeeded has not failed along the way"
    Arianna Huffington

    Read the first 10% of my books "Didymus" and "The BEAST of BIKO BRIDGE" for free
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  10. Thank given for this post:

    Dave A (03-Jun-10), daveob (31-May-10)

  11. #20
    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by manie van niekerk View Post
    Dont know where to get the meet and greet forum.
    http://www.theforumsa.co.za/forums/f...splay.php?f=28

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