By The Rebel School CEO, Simon Paine.
So you want to find out how to write a business plan?
You’re in the right place. Sort of. Let me explain here’s the few things that you need to consider first.
What is a business plan for?
Business plans are a tool you can use to give people more confidence in your business idea so that they can give you money. That’s the basic premise of a business plan is to get money.
Getting money for free (grants) isn’t impossible but is less likely than it’s been for years. Sure there are grants around but they are not so common now.
Also you’ll probably find that even to access free money you have to fill in a form and the form quite often resembles a business plan. The purpose of a business plan is to get money from someone else. The people that really love a business plan are those people that make money from a good one, such as accountants, bank managers etc.
They love a business plan because a business plan provides them with a document for them to make money.
When is the worst time to borrow money in business?
Thousands of people every year get into debt trying to start a business and here’s what we want you to think about. When is the worst time to borrow money in business?
At the beginning!
Because you haven’t got any customers yet. What we want to help you do is to figure out the viability of your business without needing other peoples money. You’re much more likely to be in business in a year’s time.
Does the idea of writing a business plan excite you? Do you think a business plan will change your life?
Do you think it’s more likely that if you start a business without needing to borrow money or use up your precious savings that it’s going to be a more enjoyable experience? Business is supposed to be fun otherwise why do it?
A business plan doesn't guarentee success
Since 2012 we have trained 20,000 people in seven countries on how to start a business without spending any money, without getting into debt and without the need for a business plan.
We are not saying don’t plan your business, that would seem to make sense, but this is about saying a business plan (there are thousands of templates that you can use on the Internet) Isn’t going to guarantee your success in business. But something else is.
Remember business plans are a work of fiction
At the beginning of your business you simply haven’t got enough information to accurately determine your business success.
Writing a lengthy detailed plan before you have more information is just guess work. If you borrow money, make big purchases and make hires based on thin air guess work then you’re likely to end up with a lot of stress and a lot of debt.
It’s only once you’ve made some sales, spoken to customers and delivered your product or service that you really start to understand how to pull a plan together.
Even when you are ready to make this plan, it doesn’t have to be 26 pages long (or whatever the recommended amount is these days!).
It is good to know your numbers
Your mini plan should consider the numbers you want to hit. For example do you know how much money you need to make every month in your business?
But here is the important consideration.
Your business idea isn’t a business yet. I want you to think of it like a mini experiment.
Too many people waste their time and effort and money trying to launch a business before they even tried to sell anything. Start with sales to something you love and see if you can get someone to pay for it.
If you enjoy it, your customers enjoy it and you make money then you’re on your way to building a business.
But it’s not a business until you’re at that point.
What is a mini-experiment?
For your mini experiment, choose which product you are going to sell to which type of customer and how you’ll find that customer.
This can be as simple as I’m going to sell rainbow trainers with wheels and lights on to parents of 5-10 year old kids. I’ll find my customers by going to school fairs, contributing to Facebook parent groups and speaking to other parents.
Taking the risk out of starting a business
Remember, the traditional approach to starting a business starts with risk: write a lengthy business plan, borrow money, set up legal structure, start spending money and then maybe in year two you’ll make a profit.
We have trained thousands of people in the opposite and save them from the misery of debt.
You don’t need this stuff anymore to start a business you can start a business in minutes without spending any money with thousands of free tools like websites, social media and other ways of getting things for free.
Give yourself the best chance of launching a successful business start with sales.
Pick one idea, choose your own target audience and start making sales.
Once you’re up and running then you’re able to add more details to your plan.
So what’s your next step?
Simon started the Rebel School (formerly Pop-Up Business School) with Alan in 2011.
As well as helping start-ups realise their business dreams, he has coached, trained and facilitated senior leaders from some of the world’s most famous companies including Microsoft, British Airways, and Thomson Reuters.