It happens so often that it still stuns me, companies that love to change their whole business plan to match what will work for them at that moment. And I haven’t seen it happen once or twice, I have seen it dozens of times. And I still cannot get my head around it.
In the late nineties when I started my first business, my partner in crime and myself had worked so long and hard on our business plan. We thought we knew what we were doing, and of course, one bank after the other trashed our plans. And every time, we got valuable advice, and we went back to the drawing board, look at what we were doing wrong, and then rethink that before modifying it. In the end, when our real business plan was fine, we realized that we had to have it worked out by a team of accountants, who actually made our ‘numbers we believed were right’ actually viable.
We walked away with a wonderful business plan. Perfect. And around that time, or not much after, we decided to quit. Why? Oh, simple, we were not ready yet for what the business would bring. Here is the thing; the business plan showed us what we were up against, and at that moment, two guys with a plan but no money at all, we were simply not ready.
We decided to cut our loses made so far, and not quit, but put the plan in hibernation. It would happen, but when we would have the right people and the right assets. It eventually became the most expensive, but also most important lesson in business anyone could ever ask for. And over the years it has prepared myself for continuing what I wanted to achieve. Because one thing I always remember were so important; A goal, A plan and the SWOT.
Most of you probably are aware of the SWOT Analysis, which should form the basic self-reflection tool in your business plan. Everyone always has a plan, and everyone always think they will succeed. Oh, we lied on our SWOT. Because we wrote our plan to appease investors and banks. But we learned the valuable lesson that the SWOT is a self analysis. And that the whole business plan should be something that takes you yourself on a journey of discovery through your own company and plans.
For the ones who don’t know the SWOT, it is an analysis of your Strengths, Weaknesses, Opportunities and Threats. For example, if I want to build and launch a new CMS tool, my Strengths in that plan is that I have a good understanding of the relations data need to have to become as useful as possible, and I can build it, prototype it and have a strong network to have it built for production. A weakness is, at production level, I need help I might not have in time. The opportunity is maybe a new client that is willing to pay a lot for it. The threat is that development of said CMS tool might take longer than the client is willing to wait and have them chose for an off-the-shelf product.
This Analysis for this little project would already raise enough questions; The Strengths and Opportunities give the reason why I can. The Weakness is the thing I have to work on to make it not a weakness anymore, and the threat needs to be eliminated. If I cannot fix the weakness or I cannot eliminate the threat, this production is not worth my time. Simple.
Makes sense, no?
Why is it then that I still see so many companies, even when they are years in their existence, rewriting their whole business plan to just make things look good. Of course I know the answer, and it frightens me. First of all, not everyone running a company might be as professional as we hope them to be. Secondly, a lot of people owning a company simply do not want to see something bad in what they are doing, or being faced with their weaknesses. That, on it’s own, is already the weakness in the business plan.
I have made countless new plans, and it showed me over time the progress that I had made, and when it was a good time to reboot the company.I still have massive threats and weaknesses, but the strengths and opportunities have also become so much better, and the weaknesses are all having solutions. New ones will show up though, and that will prepare me for more. It should never go that easy.
The worst part is, I also understand that there are enough people investing money in companies who do not do the research themselves. Sure, there are companies without a good plan that rise, but most of them don’t. For every success story there are a hundred failures. And you know what? It should be.The real entrepreneurs will try and try again.