Last week we posted an announcement from Palo Alto software promoting a small business webinar. At the time I thought it something to pass along to anyone who would be interested. But a while ago I started thinking about it and it occurred to me that for some techs getting into the IT business, such a webinar, while promoting the company’s products, might actually be a good first step toward opening up shop.
The thought came as I glanced over my shoulder at the bookcase behind me in my office and my eyes fell on the retail box for Palo Alto’s Business Plan Pro 2005, which I purchased a few years ago to update the business plan for Savoia Computer. I had used an earlier version of Business Plan Pro and felt compelled to upgrade for some of the newer features. I had also prepared a business plan with BPP for a client as a paid consultant and wanted to be able to update his as well. I hadn’t used it for awhile and after I built a new computer for myself last year I just never reinstalled it.
It isn’t that I didn’t want it on my system, it’s just that I had been thinking about getting out of the computer business to do something else and felt that I really didn’t need it anymore. But so far the other pursuits have not paid off as quickly and easily as I thought they would and I haven’t been as organized and focused as I should be in reaching those goals.
I watch a lot of techs get into the business without a business plan. When asked, they say that they know what they want to do and how they are going to get there. They say they aren’t planning to get a loan from a bank, so why go to the trouble of creating a business plan? Apparently they think that a business plan is something you create as a formality to impress a loan officer in order to convince them that your idea will work so they will lend you the money. It isn’t something you actually need to run a business.It is just part of the process of securing a loan.
Actually, that isn’t the purpose of a business plan at all. Sure, it’s needed for a loan and required reading for potential investors, but it isn’t something created solely for that purpose. It is a document bankers and investers refer to that is supposed to already be there – a living, working roadmap for building your business.
The business plan isn’t a marketing piece for investors, although it can be one. It is a blueprint for starting and managing your business. It is a tangible layout of your idea, a method of putting your ideas on paper to flesh them out and ensure that you have a clear vision of how you will proceed in your venture and what turns you expect it to take. It is a timetable for your business project and a roadmap of your goals for success. It isn’t something to doodle up on a restaurant napkin and toss out with the dinner tray, it is something to write down, reference and follow. It is your plan of action for success.
My client is a perfect example of someone who did not understand the purpose of having a business plan. I spent a considerable amount of time and effort preparing a business plan for the client only to have it come to naught. Sure, he paid me for doing it, but his sole purpose for the plan was to obtain a business loan. Yes, he got the loan and as soon as he did, the business plan was put away and forgotten.
If there was anyone who needed a business plan to follow, it was this guy. He is the type who tends to come up with an inspirational idea one day, implement it on day two, then decide it isn’t really what he wants to do on day three and by the end of the week has changed his mind completely, abandons it and comes up with something else.
He had some good ideas, some of them had great potential, but he wouldn’t really see them through. He would start projects before he really thought them through and drop them before they had a chance to really develop. Needless to say his business isn’t doing very well at all. In fact, he still owes me money for another venture.
This is not to say that a business plan has to be followed to the letter. On the contrary, you need to be flexible and change your plan as you go along. As I said earlier, it is intended as a living, breathing document that changes and grows according to the needs of your business.
However, without a solid plan, you risk becoming like my client, forever struggling because you have no real sense of direction.
So, while attending a webinar on business planning isn’t mandatory, I highly recommend it.