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Do Business Plans Really Matter?

vistasad — Mon, 20 Apr 2009 05:21:05 GMT

Alot depends on the type of funding agency you are approaching.
Bankers are conservative they would be more interested in the business you have executed and the solididty of that business.
Centre venture funds which take a stake in your enterprise would be willing to take risks which no bank would.

So part of the relevance of your business plan is related to
1 The type of funder you are approaching
2 The business you have executed.
But in general very few funders would bankroll a startup in which none of the partners put in money.
The best of business plans would be viewed with suspicion.

Re: Luckiest

consultingbob — Sun, 19 Apr 2009 22:25:38 GMT

Disspointed with score in Painesville Ohio

Sadly, I have to agree with you on that one.

I have met and spoken with many SCORE counselors over the last 15 years. I have yet to meet one that was up to date on current technology and business methods to understand how the new world market operates for self employed contractors and small businesses that specialize in today's newer technologies.

Perhaps for small businesses in the traditional "Brick and Mortar" type of situation they might be a good resource, and I'm sure they have done some good in those situations, but for the rest of us, I have not seen any use for them. On this forum especially, in the past 3 days what I have seen is a lot of disrespect, non-answers and a lot of really bad internet etiquette, but not a whole of actual help.

Bob Parker
Complete Internet Consulting

Luckiest

MICHAEL75065 — Sun, 19 Apr 2009 03:07:13 GMT

So your a score counslor. I went to a score office in Painsville ohio about my business and the counselor I met were a joke. I could done all this on the internet. I wanted tideas on starting a ecommerce business and maybe getting a mini loan if possiable. I wasted my time.

What do score actually relly do. What does score rally offer.
I know there probably some good counselors and offices and some lousy ones.

Disspointed with score in Painesville Ohio
Michael75065

Re: Do Business Plans Really Matter?

vistasad — Thu, 16 Apr 2009 05:47:42 GMT

Luckiest this should interest you.
A few years ago a newly promoted CEO originally from a marketing function was asked by the company to

prepare a business plan. This for a 10 year old company with a good range of skin care products. He struggled through the exercise with my assistance. The company was looking for a large infustion of funds.

Finally the owner of the company tore up all the plans and put in her own plan. She made stockists cough up money and provided stocks in lieu. The compan's products rolled merrily after that.
That's called leveraging.

http://www.vistasads.com

Re: Do Business Plans Really Matter?

NoBullFunding — Thu, 04 Dec 2008 02:20:55 GMT

Luckiest, in response to your comment that you've been told that a business plan is the first thing a lender wants to see, I think it depends on the situation. A business plan will be more important for a startup than an established business when it comes to a loan application. For example, an 11 year old technology business (such as the one who posted today on another thread) who is need of a loan will rarely be asked for a business plan from their lender when applying for a basic run-of-the-mill line of credit. At this point in their life, the business either demonstrates cash flow or it doesn't.

I can also tell you that in some banks, a business plan is required because somebody once upon a time decided that it should be part of the application, but the underwriters for the most part disregard them.

Re: Do Business Plans Really Matter?

Lighthouse24 — Wed, 03 Dec 2008 16:43:59 GMT

As far as my own businesses, I have approached things much like a ship captain or football coach. I begin with a course laid out or a game plan in mind. Sometimes everything clicks and I follow the plan precisely. Sometimes it all goes out the window on the first leg of the voyage or in the first quarter of the game, and then I adapt.

Whether you're trying to bake cookies or win a world war, preparation is usually the key to success. Not a having a viable plan before you start will waste time, resources, and maybe even lives. Yet stubbornly adhering to a bad plan (or one that is longer relevant) is equally wasteful.

I think the discipline to plan and the ability to adapt are both necessary for a business leader (or any leader). The better you are at planning, the less you'll have to adapt. The better you are at adapting, the less you'll have to plan.

Re: Do Business Plans Really Matter?

Iwrite — Wed, 03 Dec 2008 14:59:08 GMT

What if you are not looking for funding? What value does a business plan hold for a business owner? And how true to do people remain to the plan when it comes to the running of their business?

I look at the financial aspects of the business plan as only one chapter of the book - I don't mean that it has to be long but that there is more to the business than funding. There are issues that if addressed properly should help a business owner stay on course. How true to the business plan are you really?

In the past, I have read the business plans for some of my past clients and was amazed - the business I was dealing with looked nothing like the dream they had put on paper. Gone was the insightfulness, the understand, the passion and direction. It was like seeing your childhood hero no longer in his or her prime, a shell of what you had known.

I became jaded about business plans because of this. I know of people who have opened and run successful businesses without a business plan but they have a clear idea of who and what their business is, and fight hard to remain true to that dream.

I'm not saying I don't believe in business plans or don't have one, I just think they are useless if you don't have the commitment to stay true to it. I know it can and should change but there are core beliefs that should be reflected in it and how you run your business. That's what I think about business plans but then again, I am the non-business advertising guy.

Re: Do Business Plans Really Matter?

DomainDiva — Wed, 03 Dec 2008 13:16:31 GMT

I wrote the first business plan in late 2005. Since then, it has changed dramatically as our milestones and situation(s) changed. Although we will not officiallgy launch unit March 2009 there is already some industry 'gossip' about what we are doing. Being prepared is important and an up to date, coherent and comprehensive business plan that explains EXACTLY what you are doing is very important.

Not only do we have technology to show, we have a business plan thats up to date and shows what we have already accomplished, when we will launch and why we don't need an investor. Thats right, we dont NEED an investor because we have plan A (proceeding post launch with no outside money) and plan B (proceeding post launch with outside money). The business plan shows plan B. However since I am the leader I have to know in advance how to proceed without any additional outdside funds...hence plan A. The business plan can always be revised and updated.

My business plan does not have any financial reports attached. I have a projected 'extremely conservative' report that is available if the interested party wishes to go further. After doing some research on business plan financial reports I decided that I was not cut out to start an investment relationship by lying and making things up. I tell possible investors these things up front. So far, it has worked.

We decided to let the team and the technology speak for themselves. Risky? Yes. Honest? Much better. At least our angel investor thinks so.

Re: Do Business Plans Really Matter?

NoBullFunding — Tue, 02 Dec 2008 23:55:39 GMT

Great replies all. Lighthouse, as always, is spot on.

As I think more about the topic, I realize that my argument is based on the myriad of business plans I have seen by people who have no experience and no money. Perhaps the best way to say is like this: before an entrprenuer goes waltzing into a bank, they need to understand that while it's important to have your ducks in a row...bankers make decisions based on the PAST (ie what's your experience and how much did you make), not what you claim will happen in the future. So...unless you have some outside source of income, some cash stashed away, or you are buying an existing profitable business, you banker will won't be able to finance your brilliant idea.

Re: Do Business Plans Really Matter?

bigcloudmedia — Mon, 01 Dec 2008 05:43:54 GMT

I think that a business plan matters to the person who made it and it is a matter of perspective. It acts as a way to organize all of the plans for the business into one understandable plan. It is known that most start up businesses don't know their projections and probably just pulled numbers out of their heads and it is their mistake for trying to sell that too you. That should be goals for the business owner.

A business plan does not by any means guarantee a bank loan or even a meeting with a banker. All it does is show that the business owner cares enough about the business to try to plan it out right from the start instead of building something out of thin are and picking up the pieces later. I think a well laid business plan does wonders for the business because it organizes the route to take and what still needs to be done.

Before going to a banker, I would have some kind of proof that the business that I want him/her to finance is going to return their money and then some. I would include that proof in the business plan presentation but not just present the business plan itself. I wouldn't loan my money to someone who just wrote down what they are going to do either. Not enough exists there to justify the loan.

So all that being said, I think that the business plan is essential for the business owner but not neccessarily for the bank. If you have a solid business plan and the financial proof the bank requires, I am sure the loan would come alot easier. Both items need to be there though to prove that you know where you want to take your business, how to get there and that it will give a nice return for the bank.

Thanks for the post NoBullFunding. I think alot of us had the idea wrong and I am glad that you cleared it up from a bankers standpoint.

Regards,

Koji Flowers
Big Cloud Media
www.bigcloudmedia.com
"We don't just build websites, we open doors."