10 statements not to make in your business plan

My good friend and business partner Nass and I have decided to create a series of articles during the year, to be issued on a monthly basis. The “golden thread” running through the series is “How to avoid growing your business (considered through 12 lenses).”

So, please enjoy Lens 1 , which is entitled 10 statements not to make in your business plan.

• I don’t know whether I’m running a lifestyle business or a value business

It doesn’t matter which your business is, as long as you know and plan your personal finances accordingly. If you have a lifestyle business, it is literally funding your lifestyle, and on the day you stop it stops. If you have a value business, you have built something which you could potentially exit with a trade sale. By the way, providers of finance do not see it as their job to fund your lifestyle!

• I hope the fish will bite

Hope is not enough. You need to plan to make the fish bite. “Hope is not a plan” Vernon Hill (founder of Metro Bank).

• This is a low risk/high reward business

This is a statement that the reader would find it hard to believe. You need to be able to mount a robust case to make this statement.

• I have no competition

The reader would consider that either a) you have been lazy and not tried hard enough to identity competitors or b) if there is no competition there probably is no market.

• I can fulfil all the required tasks myself

Highly unlikely that you can do this to the requisite standard. You need to undertake a “business skills inventory” and a self-awareness test of some sort. The former will indicate your skill strengths, and where you would benefit from technical support; the latter will indicate your behavioural strengths, but also areas where you are less strong, which would adversely impact your ability to start and grow a business. By way of example, if you are not particularly outgoing how are you going to cope with networking as a potential route to market?

• I have no need for a “Plan B”

Everybody needs a Plan B (and sometimes a Plan C!). You absolutely must do some risk assessment on your idea, and some contingency planning, so that you can adapt your business if the marketplace judges it different to the way you do.

• My financials are based on conservative assumptions

A commercially savvy reader will discount your revenue forecast by 40% and assess whether you still have a business. A wise old man once said “Halve your revenues, double your costs, and you won’t be far off”.

• Everybody “gets” my message

Have you trialled this? If not test your message with a form of “Chinese whispers” , using a mix of strangers and friends, and see if the message you hear back is what you intended.

• My marketing strategy is so good that the sales will take care of themselves

Typically people buy people before they buy the product or service, so to a large extent this statement is blown out of the water. Your marketing material gets you on the dance floor, but doesn’t mean you will win the dance competition.

• My product will sell itself – it’s a no-brainer.

It’s hard to think of an example in history where this has been the case. There is probably an exception that proves the rule somewhere, but we don’t know where it is! You have to make people want to buy what you have to offer, which is very different to it selling itself.

Nasser

Founder of Business Pulse

David

Founder of David Mellor Mentoring