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IBC P5 Writing a Business Plan

Part of the IBC course:
“In preparing for battle I have always found that plans are useless, but planning is indispensable” (Guy Kawasaki, 2004).

When one prepares to take action towards a new business idea, planning is inevitable. Vision of the desired future is part of the plan, otherwise, there will be no motivation to act upon the idea. This vision of what the business might look like within the owner’s mind, evolves with time passing by and with information related to the idea accumulating.

This process is natural, but it becomes more complex when someone else, such as investors or potential customers, try to understand what the owner actually thinks and how he envisions her/his business. That is when the business plan comes in hand. The business plan is a written document compiled with the owner’s vision of his/her business and the various strings attached to it, background for the business idea, what problem plans to solve, how the solution looks like, how to achieve that solution or what costs and benefits this solution involves, financial, social or of other nature.

 

The reason to write a business plan is usually because it’s part of the ‘job’ when dealing with investors. A business plan has to be ‘in the file’ (Guy Kawasaki, 2004). Also writing on a business plan does have the benefit of forcing a team to work together to formalize intentions. Writing a plan makes the team consider issues that it had overlooked in its euphoria or overconfidence over the idea.
I believe that pitching and planning are the initial first important steps when venturing into the business environment. Pitching may be more persuading and efficient, as it takes less time to read or watch. The business plan on the other hand, transposes thoughts and vision into a formalized form of communication, that should be easily transmissible and understandable by each who ventures into reading it. In the end, organizations are successful because of good implementation, not because of good business plans.
MLM (2010)
References: “The art of the start” (Guy Kawasaki, 2004)

8 comments on “IBC P5 Writing a Business Plan

  1. So, plans are useless, but planning is indispensable. Is not a business plan simply to write down the “planning”, so would it not be same as making a plan?

    Regards,
    Sara

  2. I think it is good to have written plans in order to guide you when you loose focus, therefore they are useful somehow. But one shouldn't just follow them to the letter, therefore there should be always room for changes and improvisation!

  3. hey mihai
    i enjoed reading your blog.there is a point that
    the you wrote:the reason to write a business plan is usually because it's part of the 'job'.it is true but i think it is necessery for every one who wants to improve his or her idea,maybe the idea will not be acceptable by venture capitalists so it needs to revise.

  4. Hi
    I also believe that plans have importance, specially to communicate with stakeholders. And even plans can give a good direction for entrepreneurs. However, plans have a negative impact on flexibility which is part of entrepreneurs quality.

  5. Hi Mihai,
    In my opinion, the most important aspect of writing a business plan is not the planning itself but the learning process behind it. Entrepreneurs will find important information on which they can build their company, develop strategies and even find (sustainable) competitive advantages, as they analyse the market environment (external / internal analysis). I will support this with a finding by Honing and Karlsson: Even though it is only indirectly, writing a business plan does affects survival in a positive way, entrepreneurs will benefit on aspects as learning and efficiency outcomes. What are your opinions about this?

  6. If I may refer to my theory of business plans and your comments related to it. Yes, Sara, plans are sometimes useless because life is not linear. Business life in particular. Planning on the other hand, implies 'thinking' about plans, making up scenarios of how your plan might actually end up, but you never know for sure… It might sound a bit contradictory but what I am trying to say is that we should remain open to possibilities and not stick to the plans we made when we were 'kids', as Samia stated. Things change, plans change. But it's a good way to realize how far you've come when you actually read up your initial business plan that you had in the first months of your business creation. Personally, I think it would be an interesting and helpful process to write a business plan for my Erasmus House project with the details I have atm that will help me figure out more and maybe communicate with people (potential investors) better, but this plan might turn out so different in one year time. It better! 🙂

    Jelmer: I agree, writing a business plan is a learning process. I would add to your comment that it would be better and more strategic to write a business plan in a team than by yourself. This way there will be interaction among the group that will foster more efficiency at a higher level (strategy, competition etc).

    Thank you all for your comments!
    //Mihai

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