Starting or growing a business requires more than wishful thinking.
There’s an adage in my COSE Business Planning course material that says, “A goal without a plan is simply a wish.” A business plan provides the road map to move that goal from wish to reality.
Business plans can be completed at various stages of a business’s life cycle. They’re not just for start-ups seeking cash; they are also valuable tools for growth of an existing business.
In 20 years, I’ve read a lot of business plans, some written for start-ups, others for well-established businesses seeking growth or change. No matter who wrote the plan or for what purpose, there were two common blunders — too much optimism and not enough focus.
Unbridled optimism
The No. 1 blunder plan writers make is that they get a bad case of unbridled optimism without any solid footing in reality, resulting in sales and profit projections that would make any CEO envious.
That optimism needs to be tempered. The numbers must be believable. Don’t reduce projections just to reduce the numbers, but if the projections can’t be backed by fact, and if the facts are not documented , they can only be considered entrepreneurial optimism, not reality.
Make sure you balance the two.
Lack of focus
The second blunder is the “we can conquer the world overnight” syndrome.
You can’t have too much focus in business. A strong focus allows you to concentrate your limited business resources in the most impactful areas, helping you get a much greater return on your invested resources and a better opportunity for success.
Even if your company’s product or service can be sold to different markets, or in different shapes and sizes, the key is patience. A plan that documents a slow and steady strategy of attacking markets one at a time will have more credibility than one that outlines a widespread attack.
A business plan can help make your dreams a reality, but it has to be realistic and well thought out. Now is a great time to think about your plan and enter the upcoming COSE Business Plan Competition.
It could give you the discipline you need to complete a plan, and you might win money to get your plan in motion. For more information, visit www.cosechallenge.com. Joel Strom ([email protected]) is director of Joel Strom Associates LLC, the growth management practice of C&P Advisors LLC. The firm works exclusively with closely held businesses and their ownership, helping them set and achieve growth objectives while maximizing profitability and value. Reach him at (216) 831-2663.
