Text: Laura Wintemute
Schools of thought vary, and personally, I tend to act first then plan. However, when starting my first business, I knew that writing a business plan was an important task, I just didn’t know exactly when or why it should be done. I’ve read in various articles over the years that success rates for entrepreneurs who plan are higher but getting the timing right is important. The real key to succeeding in business is being flexible and responsive to opportunities.
It’s been observed that entrepreneurs will need to be dynamic and change course quite often, whether it’s due to a product or service being better suited to an alternative market than the one it was originally intended for. I’ve been flexible and have had to adapt as my business has developed over the years.
Most start-up businesses write their first business plan because they are applying for a loan or seeking funding from investors. But, beyond needing to develop a plan that will impress the bank or your investors, you want to build a solid company. You want to develop a sound strategy that will help your business grow and be successful.
Writing a Business Plan is a necessary evil. Not everyone has the knowledge or inclination to do it, but the word on the street is that the most successful entrepreneurs were those that wrote their business plan between six and twelve months after deciding to start a business.
It will ensure that you pay attention to both the broad operational and financial objectives of your new business and the details, such as budgeting and market planning.
It helps focus strategy, manage milestones, manage metrics, assign and track responsibilities and performance, and manage money using projections for sales, costs, expenses, and cash.
"Things come up that force you to change course. It could be an obstacle, or it could be an unexpected opportunity."
Change is inevitable
We can rarely stick to the plans we make when we start a new business. Things come up that force you to change course. It could be an obstacle, or it could be an unexpected opportunity.
When I started Homestead, I knew I wanted to help every newcomer to Denmark, but how was I to make money when I offered a free Welcome Kit? Who was I selling to? Was it the actual newcomer or their hiring company? Who would pay me?
Your business plan will change over time as your business grows, and you may end up having multiple business plans as your objectives change. By updating your business plan as you grow, you ensure to capture your full potential. Change is inevitable. Be flexible and be ready for it.
A year late
My daughter asked me what “procrastination means.” I told her I’d tell her later.
I’ve always been a procrastinator who works very well under pressure.
By the time I got around to writing my first business plan, I’d already been in business for a whole year. As it turns out, this was the optimum time to write my business plan. I knew what I was selling and who I was selling it to.
During that first year in business, I was invited by Connect Denmark @SPRINGBOARD to pitch Homestead. A videotaped pitch to a panel of 10 professional businessmen and women. Similar to “Løvenes hul” or Lion’s Den. One of their requirements was that I shared my business plan before the Springboard Pitch. Having to complete a business plan is well worth the time and effort as it allows one to really research your industry, market and competition. Having to present my Business Plan to a group of professionals enabled me to truly master my thirty-second elevator pitch. It was a massive kick start for Homestead.
The more you know about your industry, your prospective customers, and the competition, the greater the likelihood that your business will succeed, and the best way to learn this is by sitting down and writing your business plan. So, don’t put it off another day!