The Myth of the Business Plan

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There have been a couple of threads regarding the need of a business plan.

Here's a little more input.

Myth of the Business Plan


Joe Mobley
#business #myth #plan
  • Profile picture of the author TonyMontana
    I don't 100% agree as I feel it is sometimes important to have some kind of plan that can be looked at from time to time, if anything else but to track your progress with your original expectations
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  • Profile picture of the author timesaver22
    Hi
    I never really ever sat down and put a plan on paper for the way I wanted my online business to move towards. My offline work this was done before even got round to finance in place just never did the same online. Its online over the last few month after working with a mentor that I got the job done and now I am moving forward way faster than I ever dreamed..
    Terry
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  • Profile picture of the author Toon-c
    It's not necessary right! but it's helpful to keep you focused ..
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  • Profile picture of the author Gary King
    The real issue is that without a plan, MANY people never DO anything.

    Rather, it's more related to GOALS - lots of folks will continue to flutter from flower to flower never really driving forward without specific goals and steps to achieve them.
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    • Profile picture of the author theemperor
      Interesting!

      She is probably against long winded 100 page business planes.

      I agree, 100 pages = waste of time.

      But a 1 page business plan would be worth it, and it is probably worth writing one each month.

      • What you plan to do (1 sentence)
      • The proof that there is a big enough market for what I do (1 sentence)
      • The cost in time/money for developing the idea, breakdown
      • The cost in time/money for marketing the idea, breakdown
      • The cost in time/money for maintaining the business, breakdown
      • The cost in time/money for supporting the customers, breakdown
      • The revenue expected and when it will come in
      • How I will test the market? (1 sentence)
      • Cash flow projection - could I run out of cash at any point along the way?
      • Time flow projection - could my business fall apart due to my time getting sucked up because I can't or wont outsource?
      I probably missed something but this is how I will do it.

      Could be done using a pen and A4 sheet, and perhaps a calculator.
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      • Profile picture of the author Dave Rodman
        Banned
        Originally Posted by theemperor View Post

        Interesting!

        She is probably against long winded 100 page business planes.

        I agree, 100 pages = waste of time.

        But a 1 page business plan would be worth it, and it is probably worth writing one each month.

        • What you plan to do (1 sentence)
        • The proof that there is a big enough market for what I do (1 sentence)
        • The cost in time/money for developing the idea, breakdown
        • The cost in time/money for marketing the idea, breakdown
        • The cost in time/money for maintaining the business, breakdown
        • The cost in time/money for supporting the customers, breakdown
        • The revenue expected and when it will come in
        • How I will test the market? (1 sentence)
        • Cash flow projection - could I run out of cash at any point along the way?
        • Time flow projection - could my business fall apart due to my time getting sucked up because I can't or wont outsource?
        I probably missed something but this is how I will do it.

        Could be done using a pen and A4 sheet, and perhaps a calculator.
        Honestly, I don't even know how someone new to a business would be able to answer those questions in any meaningful way.

        My first website is still going strong and bringing me in a lot of money. This is the type of exercise I do with THAT business. I look at inventory, anticipated ordering schedules, costs, marketing costs, partners/wholesale partners, affiliates, etc. But I actually have data to look at and use. When I started out, I wanted to sell ONE product for more than I bought it for.

        For the most part, business plans are just "Playing Business"
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        • Profile picture of the author TheWealthSquad
          It really depends on what you do with it and what you expect from it.

          A business plan should be part of every business. Even if it is only a one napkin plan.

          Two businesses I know started on the back of a napkin (Southwest and Liberty Tax). The plan was simple and succinct.

          You do need a plan for your business.

          How you make money - I bet most struggling business owners can't answer this one.

          How you get new customers/clients/leads/etc - What activities you can do to increase this.

          What value you bring to the marketplace

          If you don't have a plan for your business then how do you determine where to spend your time?

          It doesn't have to be a traditional business school plan but every business can benefit from a properly executed plan.

          Think any coach goes into a game without a plan?

          Don't dismiss it because you don't see the benefit. Ask how you can benefit from having one.
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        • Profile picture of the author CDarklock
          Originally Posted by Dave Rodman View Post

          Honestly, I don't even know how someone new to a business would be able to answer those questions in any meaningful way.
          And that's how someone new to a business knows he's not ready to start his own company in that business.

          It's up to him whether he does it anyway, but by writing up the business plan, he at least gets some idea how big the red flag really is.
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          • Profile picture of the author gekko2.0
            Originally Posted by CDarklock View Post

            And that's how someone new to a business knows he's not ready to start his own company in that business.

            It's up to him whether he does it anyway, but by writing up the business plan, he at least gets some idea how big the red flag really is.
            Right on the money!!
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        • Profile picture of the author theemperor
          Originally Posted by Dave Rodman View Post

          Honestly, I don't even know how someone new to a business would be able to answer those questions in any meaningful way.

          My first website is still going strong and bringing me in a lot of money. This is the type of exercise I do with THAT business. I look at inventory, anticipated ordering schedules, costs, marketing costs, partners/wholesale partners, affiliates, etc. But I actually have data to look at and use. When I started out, I wanted to sell ONE product for more than I bought it for.

          For the most part, business plans are just "Playing Business"
          I think you can't answer the questions in a meaningful way, then any success is just a fluke. I know I've fluked small IM success before. Now I want to plan for it

          If you are new to a business you probably need such a plan even more. A simple way to create it is to talk to people who are already successful in what you plan to do ... e.g. talk to an existing article writer or info-product seller and get some ideas on numbers and how to research markets.
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        • Originally Posted by Dave Rodman View Post

          Honestly, I don't even know how someone new to a business would be able to answer those questions in any meaningful way.

          For the most part, business plans are just "Playing Business"
          I totally agree. If you're new in this business, how could you possibly write any meaningful business plan at all?

          Business plan = playing business without actually doing anything valuable.
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          • Profile picture of the author theemperor
            Originally Posted by Anonymous Affiliate View Post

            I totally agree. If you're new in this business, how could you possibly write any meaningful business plan at all?

            Business plan = playing business without actually doing anything valuable.
            So what should a complete newbie do? Randomly hit keys until he makes money?

            He will have some kind of plan!

            I am advocating writing that plan down. Give it some structure.

            The process of writing it makes it obvious where potential cracks in the plan are before embarking on a lot of time or money.
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            • Profile picture of the author CDarklock
              Originally Posted by theemperor View Post

              So what should a complete newbie do? Randomly buy WSOs until he makes money?
              Fixed that for you.
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  • Profile picture of the author Will Edwards
    I may be in the minority, but I have never been much of a fan of planning. It was nice to read the article because I have always thought that perhaps I should get more into it. Of course I do have plans, but they are all in my head.

    Will
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    • Profile picture of the author Gary King
      Originally Posted by Will Edwards View Post

      I may be in the minority, but I have never been much of a fan of planning. It was nice to read the article because I have always thought that perhaps I should get more into it. Of course I do have plans, but they are all in my head.

      Will
      I'm sitting there beside you Will. That said, IMHO, it becomes much more important to have it all "down" when there are employees, etc. and survivability of the business after the founder is gone becomes a concern.
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    • Profile picture of the author smartlazy
      Banned
      I agree with the OP. A comprehensive business plan is just a waste of paper and ink. Just a simple one-page summary of plans and goals is enough for me.
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  • Profile picture of the author ryanbiddulph
    Planning is a powerful concept for people that need the plan.

    Some need a tangible guideline to stick to. Others have a clear cut vision which acts as their guide.

    Whatever works for you.

    RB
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  • Profile picture of the author bareket57
    Wonderful article. As an intuitive person who follows her heart, I completely resonate with your article. As an astrologer, the only kind of planning I do, is check out the ephemeris so see when is the optimal time for me to do something and thank God it always works for me. for example whenever Mercury is retrograde I only use the time for finishing off a project but never for starting one.

    I would like to quote from your article:
    Great business plans may earn you an A in business school, but in real life you only get A's for achievement. So stop dotting your i's and crossing your t's and go out there and slay something.

    This is so true!!!! I couldn't agree with you more!
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    • Profile picture of the author theemperor
      Originally Posted by bareket57 View Post

      As an astrologer, the only kind of planning I do, is check out the ephemeris so see when is the optimal time for me to do something and thank God it always works for me. for example whenever Mercury is retrograde I only use the time for finishing off a project but never for starting one.
      Genuine question - are you serious? :confused:
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      • Profile picture of the author bareket57
        Originally Posted by theemperor View Post

        Genuine question - are you serious? :confused:
        I'm absolutely serious you'll be surprised how many business people ask me to check their horoscopes to see when is a good time for doing business. Astrology is an ancient art, which has always been used by all civilizations for planning and timing. There are astrologers who specialize in the niche of finance and economy.
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        • Profile picture of the author theemperor
          Originally Posted by bareket57 View Post

          I'm absolutely serious you'll be surprised how many business people ask me to check their horoscopes to see when is a good time for doing business. Astrology is an ancient art, which has always been used by all civilizations for planning and timing. There are astrologers who specialize in the niche of finance and economy.
          I just checked and it's quite a rare thing anyway. I just imagined having to search hard to find these small gaps in the year when things are astrologically good to get started. :p
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      • Profile picture of the author Steve Wells
        Originally Posted by theemperor View Post

        Genuine question - are you serious? :confused:
        I believe so.......
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        • Profile picture of the author Martin Luxton
          Whether you call it a business plan or "a clear idea of where you're going" it is important, if only to save you a fortune on unnecessary WSO's and get rich quick 'blueprints' that you'll never implement.


          Martin
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          • Profile picture of the author CDarklock
            Originally Posted by Martin Luxton View Post

            it is important, if only to save you a fortune on unnecessary WSO's and get rich quick 'blueprints' that you'll never implement.
            QFT.

            I can't count the number of times I've looked at a WSO about something and been really interested in it, then thought to myself "but I don't do that."

            As marketers, we all look for new opportunities everywhere, and sometimes we get tempted by new ideas and new methods. But knowing what I don't do puts my money back in my pocket over and over again.
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  • Profile picture of the author wendymay1
    I agree Gary

    I suppose a business Plan written down on paper can be classed as a Goal with a firm focus in mind. I have heard that a "Goal Not Written, Is Only A wish"

    So in relation to a Business Plan, good idea to write something down. Thats my opinion.
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    • Profile picture of the author VanessaB
      I am a HUGE advocate of the business plan and here's why:

      I research my market
      I know what they buy
      I know how much they will pay
      I know where they go to buy

      Now I can be sure to have what they buy and advertise in the places they go to buy it, at the price they will pay for it.

      Now I know I have a definite stream of income (cashflow, bread and butter) that will sustain the needs of the business (i.e, operational costs like hosting, Internet access bill, phone bill, etc.)

      From the research on how much I can project to gross and net, I can effectively know exactly when I want to outsource something, buy another domain name, invest in another course.

      I don't find myself wandering around, willy nilly, looking for the next bright shiny object that promises to make my business grow.

      When I see something I want, I can determine when I should and will buy it.

      For example, I want two products in the WSO section right now. I know nothing about one and a little bit about the other. I already spent money for the month on things I wanted to learn/implement, and I'm in the process of implementing.

      If I stop to read something else, and then start trying to do that, guess what! I stop working on what I have already started and it doesn't get finished.

      I have a plan for what projects I want to do each month and quarter, for the whole year.

      I look at it every 2 weeks, (when I do payroll, because I do give myself a 'salary') and if I want to adjust, or replace that book I planned to buy with a different book, I analyze the situation and decide.

      That's how I stay focused. So, I say, have a business plan.

      -Dani
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  • Profile picture of the author Quentin
    When you start making real money and investing your profits then it becomes a part of life, like it or not. Dealing with financial institutions it is how they rate you.

    Of course if you just want to spend it all then no need for one.

    Quentin
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  • Profile picture of the author gekko2.0
    I dont think a business plan is essential for a lot of businesses (especially IM) but it's definitely helpful and planning of any sort is never a bad thing
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  • Profile picture of the author flowers4love
    Originally Posted by ryanbiddulph View Post

    Planning is a powerful concept for people that need the plan.

    Some need a tangible guideline to stick to. Others have a clear cut vision which acts as their guide.

    Whatever works for you.

    RB

    Indeed people who find it difficult to focus need a plan to keep them on track. However planning just for the sake of doing what others do is senseless and for many people a waste of valuable time.

    I would like to mention here a review of mine for a WSO for helping scatterbrained people to focus and organize their business:

    http://www.warriorforum.com/warrior-special-offers-forum/301139-grab-success-now-personal-2011-success-blueprint-rave-reviews-sweepstakes.html#post3055958

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    • Profile picture of the author VanessaB
      Scott,
      The most important thing a business plan does for me, is give me insight into my market so that I know what my 'bread and butter' product/service is. This is the one thing, (with research) that I know I will make x amount of sales of, day in and day out, to cover my operating costs and provide for funds for the rest of the businesses growth.

      -Dani
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  • Profile picture of the author Rich Struck
    I could never see the point of a business plan. A bunch of charts and projections and meaningless estimates just don't really do anything for me.
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    • Profile picture of the author JohnMcCabe
      There are two kinds of business plans. The kind you show bankers and potential investors, and the kind you use to guide your business.

      That monstrous work of fiction in the pretty binder essentially ceases to exist the moment there's a thumbs-up or thumbs-down on the money. At least until it's time to show a business plan to the next banker/investor.

      The business plan you use to run your business is a living document. As many have testified above, it need not be lengthy and complex. But it should be real. What value do you plan to provide, and how do you plan to provide it? Who will be most likely to benefit from what you offer? How will you present your offer to them? What's next? Where do you go from there?

      Focusing on that plan can go a long way to easing the information overload stress and shiny object syndrome. It's something you can change based on your actual results, but you should have a good reason for changing - not simply being dazzled by Joe Gooroo's copywriter...

      So, is a traditional business plan needed? Not until you need to seek traditional financing.

      Is a working business plan necessary? For most new business owners, and even most veterans, damn straight it is...
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  • Profile picture of the author Rod Cortez
    Originally Posted by Joe Mobley View Post

    There have been a couple of threads regarding the need of a business plan.

    Here's a little more input.

    Myth of the Business Plan


    Joe Mobley
    I see where the author of that article is coming from and I agree with SOME of what he's writing about such as "paralysis of analysis", in the context that he presents it. But ultimately, he left out a very critical fact: there are numerous of types of business plans. Some you need, some you don't.

    My first business plan consisted of writing down a somewhat coherent outline on a notepad.

    My first business plan that I submitted for VC funding was over 150 pages long, took over a month of in-depth research to complete, and even then the VC had a million questions and we had to revise it more than once.

    I think John M. and CDarklock hit the nail on the head with their posts. Do you need a business plan? I think it depends.

    I found it interesting that the article cites "research" that shows you don't need a business plan. Anyone who funds companies or has started more than one enterprise would know that a business plan actually increases your chances of success or helps you decide that it's not the right time to get into that particular endeavor.

    RoD
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    • Profile picture of the author Joe Mobley
      Fist of all, thanks for everyone's contribution to this thread.

      When I hear the term "business plan" or "you need a business plan", my mind automatically jumps to the idea of a long, drawn-out formal business plan.

      I think TonyMontana (post #2) and theemperor (post #6) and some others have the kind of plan that I can work with. A short outline, a list of bullet points, etc. that gets tweaked as experience, knowledge, and income increases.

      For the most part, most Internet Marketers do not know enough to start with a formal business plan. My recommendation is not to let that hold them up from getting started.

      Anyhow, below are a couple of threads that got me to thinking about business plans for Internet Marketers.

      http://www.warriorforum.com/main-int...marketing.html

      http://www.warriorforum.com/main-int...ingamajig.html


      Happy Holidays,

      Joe Mobley
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  • Profile picture of the author Mike Hill
    Business Plans are essential if you want to grow your business consistently beyond 1 website. Business plans allow you to keep track of milestone targets, short and long term goals as well as a measure of the market. Having a business plan also allows you to clearly define your strategies beyond a few years as well as having an exit strategy in the future. A business plan outlines your overall direction so it should be reviewed and updated as you go. Review your goals and see if you're on target or if you need to revise your strategies depending on where your market is heading.
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    • Profile picture of the author Steven Wagenheim
      Once again, John McCabe said it better than I ever could.

      I didn't read the article, but based on the feedback in this thread, I'm going
      to guess that the author is not an advocate of writing out a long winded
      dissertation on what and how you're going to put food on your family's
      table.

      I agree and don't agree.

      If all you want to do is make a few grand a month, a simple outline of how
      you're going to do it is all you need.

      If you want to run a multi million dollar a year business, good luck with that,
      because that's what you're going to need...luck.

      It will be 8 years this January 1 since I started my home business. I have
      learned so much during these 8 years that I wouldn't even know where to
      begin to stress how important it was for me to at least come up with a
      simple business plan to FINALLY get my business to where I wanted it to
      be.

      Without one, you're groping in the dark and hoping for the best. If you
      have a family counting on you, I don't recommend it. Sure, if you're single,
      have no responsibilities, and would rather spend your time surfing with
      J-Mo, then yeah, take your business plan and stuff it. You can probably
      figure out something to do to make you a few bucks if you have any
      kind of head on your shoulder.

      Me? I know every little thing that I'm going to be doing next year, including
      what products I'll be creating, how much I'm going to spend on services
      and how many hours I'm going to put in.

      I can even tell you, almost to the dollar, how much I'm going to earn.

      This year, my projection was only off by about $6,000.

      I underestimated by that much.

      I'll take a business plan over no business plan any day of the week.

      But yes, I'll admit, it's not for everybody and not a must to make money
      online.

      You just won't catch me dead without one.
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