Are business plans just for funding and accountants?
You are passionate about your business idea – you know it will work.
You are a creative and can’t be constrained by spreadsheets.
In a recent conversation with Meredith Bell on her podcast, Grow Strong Leaders, Paul O’Donnell and I were sharing the importance of creating a business plan and having an independent and impartial advisor to check it.
In our book, Humble Crumbles: Savouring the crumbs of wisdom from the rise and fall of Humble Pie, we described how Paul was methodical in creating three scenarios for his business plan (positive, negative and neutral). He had been both an accountant and a global financial services executive so he was very familiar with finances and spreadsheets.
However, he had a blind spot. He had “happy ears” or a tendency to be overly optimistic even when putting together the negative scenario. And because he was so passionate about his business idea and the market gap, he tended to dismiss objections from family and friends. This is not surprising – entrepreneurs have higher risk profiles and conviction.
Also when we mentor students of entrepreneurship, Paul and I find that some are reluctant to put together a business plan because they are intimidated by numbers or they think it will stifle their creative spark.
The purpose of a business plan is to get your thoughts on paper so that you can:
• articulate your idea
• clarify what assumptions you are making
• check for inconsistencies
• discover what you might have omitted
• uncover any lack of understanding of how the business segment works.
And by sharing your business plan with “positive naysayers” that is, people who have experience and a good understanding of what you are trying to achieve, they can ask illuminating questions. They can also point out what you may not know from the perspective of improving your chances of success, not cutting you down because of their own fears or lower risk tolerance.
If you would like to discuss your business ideas and the challenges of being an entrepreneur or leader, contact email@example.com or +44 (0) 7952 068133.
To hear the podcast go to https://growstrongleaders.com/caloni-odonnell/