My Business Plan never works, so why are we always being asked for meaningless spreadsheets? There is a type of business plan which makes sense, but it doesn’t have a lot to do with revenue, costs and cash.
The way these pretend business people, in banking, government, support services etc. all ask for a copy of our business plan completely drives me up the wall. They wouldn’t know a business plan if it bit them in the rear. What’s the point in asking for a meaningless document which could take weeks to write, and is out of date within minutes of each page completion.
Well that’s certainly the case for the type of business plan these people mean – the typical financial spreadsheet with income, expenses, profit and cash flow. Totally pointless, and for one reason above all others. Every one of those cash flow based business plans depends on something we all acknowledge is never right – the sales forecast.
But there is another type of business plan which is valid, and does work. It’s the plan all these so called experts should be looking for. It explains the business strategy, tactics and contingency plans.
Of course this type of business plan must have a financial dimension to it. There has to be a recognition of cash, but that doesn’t have a number associated with it. For example in our business planning for Front Office Box our strategy has always been based on a fundamental principle.
We will only ever spend money from our own resources – no debt, no outside equity and fixed costs close to zero. This dictates a number of constraints but has safeguards built in. We may not grow very quickly, but we definitely won’t go bust either. This is important to us, because we believe the software industry is about to go into a race to the bottom.
Our competitors will have to have very deep pockets to beat us in that race.
We’ve outlined just what should be in this type of plan in Planning for Success Starting a Business,
There’s also a checklist which lists all the topics we can think of, breaking down the big subjects into easy to understand items.
And we provide some great sales pipeline management software to help get sales forecasts as accurate as possible.
These are just our thoughts of course, offered up for you to select and amend as appropriate for your business, with our compliments.
One word of caution though. Don’t expect the experts to understand about strategy, tactics and contingency. They’d need to understand about business for that.
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