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Why Your Business Plan May Be Useless

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Why Your Business Plan May Be Useless

29 JANUARY 2020

A hammer that you buy then store in the garage won't be useful until you actually pick it up and drive a nail into something. Any time someone starts a business or needs to get funding the first thing they do is put together a business plan. While this is a sound first step, just like buying a hammer if you want to build something, a lot of the time the business plan ends up being completely useless because it’s all a lie or it’s never actually used.

 

The business plan isn't just a means to an end or a nice to have accessory to make you look like a serious business person, it's a powerful tool. It forces you to actually map out how you're going to roll out or grow your business and is a guide for you to pivot from when you're on your journey. But what often ends up happening is people write their business plan, or have a company like Amras Communications write it for them, then shelf it once they secure financing or start operating. No further reference is made to the plan and the plan isn't updated to align with new realities that may affect the business. If you won't bother using the business plan you spent time and money to putting together then you might as well save yourself the trouble.

 

Another reason why business plans, particularly those put together by the business owners themselves, can turn out to be useless is that they tend to be waaaaay too optimistic. The business plan is usually used as a sales pitch so obviously you want to put the business in the best light possible, or sometimes you just really want to convince yourself that your idea will work. There isn't anything wrong with this per se but you also need to be honest with yourself, because if you're not investors will see right through the smoke and mirrors anyway and the realities of the market will hit you like a tonne of bricks. If your business isn't an attractive investment don't spin your business plan to make it appear that way, use your business plan to shed light on any short comings and adjust the model as necessary to turn your company into a viable venture. But again, as mentioned before, this will only be useful if you actually then use the plan and implement it.

 

As a company that makes its money from writing business plans it may seem counterintuitive to say it isn't useful, but our priority is ensuring that our clients succeed. The business plan is a fantastic tool but only if you’re honest about it and you actually use it, that’s why we work closely with each client and walk them through the plan we put together to make sure they understand it. We then continue to work with clients overtime to further improve the business plan based on their experience.

 

We’re not discouraging you from writing a business plan, write it or hire us to do it for you, it is definitely worth it. But the value that you realise from that investment will on be as much as you choose to get from it.