At this moment you are competing with hundreds, thousands maybe even millions of other business owners who are fighting to get customers and bank loans. I’ve been in this position before, where small business experts have handed me simple business plan loan templates that weigh a ton. You and I both know that this is a complete waste of time. Millions of start-ups have lengthy business plans, and yet they still fail. This is why I’ve outlined seven reasons why your business plan should fit on the back of a cocktail napkin.
- Everything starts with an idea.
The founder of Zappos, Tony Hsieh had an idea to sell shoes. So he posted a pair of shoes on the Internet just to see if there was a demand for it. Low and behold, someone bought the shoes. He had an idea, and he tested it. Stephen King dominated the bestsellers list in the 80s with stories that started with just a few sloppy sentences. He believes that greatness starts with just one seed, and then we have to work diligently to get that seed to grow.
- Investors want to lend you money after you’re already making money.
We’ve seen those horrible episodes of Shark Tank. We can listen to the questions the sharks ask and get an understanding of what they’re looking for: How much money have you made? How much money have you put into your business? How much were your sales throughout the year? What are your profit margins? They are not asking to read business plans, because they simply don’t care. All they care about is the potential amount of money they can make by investing in your company.
3. Banks are not here to give you money, but to take it.
You know what banks love more than charging their customers exorbitant fees? They love money, especially your money. I know that there are a million articles on the Internet that discuss writing business plans for start-up loans, but the only thing that I can say to that is BALONY. Banks that offer start-up loans normally require a personal guarantee. What does this mean? It means that you’re personally responsible for all the debt that the business acquires-and well be reprimanded if you fail to pay those debts. This means that the bank can put a lean on your house, freeze your accounts, and even garnish your wages. So when it comes to borrowing money, the LLC that you incorporated in your state isn’t really going to save you from going broke. And the business plan that you spent two months writing is not going to stop your business from going afloat.
4. A business plan is a never-ending process.
There is a crude saying in the publishing world, that once a non-fiction book is published. It is already outdated. This same concept can be applied to your ideas. We no longer live in a world where we can sit, plan, and work on products in private for six to eight months. No. Now, we have to consistently test our ideas to see how the market is going to respond. To do this, we need a great deal of flexibility and be open and willing to change. So I can bet you dollars to donuts that if you’ve written a 200-page business plan, you’re going to be reluctant to change it.
- A lengthy business plan doesn’t take into consideration fads and trends.
Fads, fads, and more fads. I had a client who wanted to do marketing via blogging and on Facebook. Together, we came up with a viable strategy on how he could reach out and educate his market. Then, he made the worst mistake any business owner could make, he quit. He called me shortly after in a weak attempt to give his business another shot. However, he got angry when I presented him with a whole new strategy. “Everything is different” he retorted. Yes, everything is different because there is a factor in planning that no one can predict. It is called change. In the brief time that this client was “vacationing” from his business. He missed out on a major trend that was happening on Facebook. By the time he got back, Facebook had changed its algorithm and killed our entire strategy. So in business, we have to strike when the iron is hot.
- Nobody cares.
No one wants to read a dry and boring business plan. I once had a conversation with a drunken professor who bitched and moaned over cocktails of how he hated reading the scratchy, cryptic writing of his students’ papers. “ I just can’t do it anymore,” he slurred. “It so unbearable.” So if you think that writing a business plan is unbearable, you can imagine the strain you’ll put someone else through trying to read it. Here is the cold, honest truth. No body is interested in your business plan or your ideas except for you. Do you want another golden nugget? No one wants to read it unless it benefits them. Maybe, your momma might pick it up and jot down a few notes. But aside from that, you’re on your own. No one will invest in you, or give you any time, unless you’ve proven that you’re worth it.
- Instead of writing business plans, write marketing personas.
Business plans can be very impersonal. Business owners seem to forget that we are all in a people business. We don’t sell people products; ideas, or services, we sell experiences. Just take a look at the 2014 Toyota Highlander commercial, featuring The Muppets. The Muppets, of course is a children’s television show. People like myself, born during generation X grew up watching the show. We can watch the commercial and revisit our childhood memories of riding in the back seat of our mom and dad’s Toyota. This creates an emotional spark. The commercial makes us feel good and compels us to go out and purchase that car. A business plan is not just about numbers. It is about teaming up an emotion with an idea that compels people to buy.
So now the debate begins, short v long business plans. Sound off below.