Rather astonishing is how often the alleged core causes for small business successes or failures (even when lacking credible factual evidence) through sheer force of repetition can often take on lives of their own – fictions versus “real world” facts. One does not have to wander far to hear the resilient echoes for alleged business success impedance or failures – inability to access needed financing, the need for more new business opportunities (set aside options, stimulus efforts, etc.), failure of government programs, etc.).
Clearly all of those are influential factors affecting success. However, as often repeated since a June, 2014, Washington, DC, Vet-Force meeting, “all the business development on the planet is completely worthless unless there exists timely support financing”. (SBA Administrator concurring, “…access to capital is the number one issue facing all small business.” (June 10, 2014 Speech, Center for American Progress, Washington, DC).
As has been repeatedly demonstrated, the country’s business financing systems have not been able to reliably or timely provide expansion/support capital when and where needed most to support small business and entrepreneurship – and the economy everywhere shows it. E.g., (Questions and complaints are widespread about the shortcomings of veteran small business funding and financing). http://www.ultimatefinancingguide.com/business-funding-and-financing-part-i-of-series/; (The Business Financing Systems Do Not Work – Why and Why Not?) http://www.ultimatefinancingguide.com/the-business-financing-systems-do-not-work-why-and-why-not-part-ii/
However, upon closer scrutiny into the studies and data one will find that in fact the prime drivers or core culprits are instead business knowledge deficiencies. E.g.,(Existing and future enterprises (regardless of size) are facing monumental financial and profitability challenges as never before). http://www.ultimatefinancingguide.com/the-business-financing-systems-do-not-work-why-and-why-not-part-iii/ The other factors merely aggravate and heighten the adverse effects.
The straight forward answers are rather basic. Certainly adequate, timely financing is essential as well as measured business development. However without the requisite knowledge for best business practices and the financial acumen to match, the equation for success breaks down entirely. It then just becomes a question of when rather than whether one gets quickly underwater with problems that can become over time.
Simply put – It’s what entrepreneurs and small business owners “do not know that they do not know” that have become the commanding influence for non success. Until that is solved, business development and even timely funding will not cure or correct anything. Both aspects tend in fact to merely mask critical cracks in the enterprise structure.
Requisite knowledge and proper utilization of
* Best Business Practices – having the know-how, skills, and tools to anticipate, create, and manage success; and
* Financial Acumen – knowing how to access the right financial tool/option at the right time and right place, as well as knowing how to use that funding to generate success. (See below,“Ultimate Financing Guide” the only complete digest focused upon and structured to deal specifically with these two critical requisite knowledge areas, http://www.ultimatefinancingguide.com/
Regardless of how creative, innovative, and/or focused the owner/entrepreneur, hope is no substitute or equivalent for having effective real world success strategies.
“Plans are worthless, but planning is everything”. Winston Churchill /Dwight Eisenhower
The “bedrock” starting point for both requisite knowledge elements – a well thought out “business plan” – an all encompassing, written evaluation or analysis of the enterprise venture covering every conceivable facet and perspective in concise, and where possible, concrete or empirical terms. It proves that what you have done, about or may seek to do have “real world” grounded substance, merit, and some reasonable degree of probability for success.
Without it, you’re just “shooting from the hip” and hoping for the best – usually just getting a sore hip! Without it, the venture by definition becomes stationed into a “reactive posture”. As a result, it will always be forced onto the defensive regarding operational and other challenges. That means events and obstacles control the business. One is then managing crises instead of avoiding them. Stated conversely, crises then manage the business!
“I was seldom able to see an opportunity until it had ceased to be one”. Mark Twain
The “business plan” becomes the originating template for both best business practices and financial acumen. It becomes the blueprint from which all key decisions on financial and management issues emerge. Without it is akin to driving one’s vehicle blindfolded in a snow storm.
Under-capitalization or lack of timely funding, the apparent cause of so many business problems and terminations is merely a symptom of existing knowledge deficiencies. Conversely, even rapid success itself can kill an enterprise. Why? Lack of foresight and planning means the enterprise becomes overwhelmed. Without a road map or a method to keep the business vehicle on target, regardless of changed conditions. There is really no place to go but astray or in the wrong direction.
“Speed is irrelevant if you are going in the wrong direction”. M. Gandhi
“You want to run out in front, prepare to be tripped from behind”. S.A. Sachs
Although “free wheeling substitutes” abound routinely justified based on convenience or expediencies, such invariably result in critical wastes of valuable time, money, and resources. Result – events now control the owner, instead of vice versa. Then the question is when, not whether, critical fractures will occur? Unfortunately, these failure risks are increasing, currently at record levels despite most being wholly preventable Id., see also, (Vetrepreneurs and Vet Business Owners Continue to Ignore Risks and Realities Portending Failure – Remedies for Success Readily Available) http://www.ultimatefinancingguide.com/vetrepreneurs-and-vet-business-owners-continue-to-ignore-risks-and-realities-portending-failure-remedies-for-success-readily-available/; (New Threats of Severe Adverse Impacts for Vetrepreneurs and Existing Vet Franchise Owners) http://www.ultimatefinancingguide.com/new-threats-of-severe-adverse-impacts-for-vetrepreneurs-and-existing-vet-franchise-owners/
So Just What Does This Business Plan Look And Feel Like?
A business plan is by definition, the overall road map of the business venture. It encompasses not only where it’s been, but where you expect or want it to go. It must portray an interesting story in concise form on every aspect the business, now and projected forward. It must provide empirical proof and evidence that the venture’s past, present, and future are reliably cast and presented.
Best format or structures for a business plan? There exist literally countless sources for guidance, even templates for most every enterprise. E.g., Ultimate Financing Guide, http://www.ultimatefinancingguide.com/ (Chapter 1, Pre-requisites for the Business Journey, B. Business Planning). Regardless of the format chosen, it should be customized to fit the company’s specific industry, market niche, competition, management, and most importantly molded to emphasize the strongest asset(s) or persuading features that will spell success. The key is “content” not “form”.
This compilation will become a critical link within the business’ existence and success. Without it requisite “best business practices” will have already been abandoned with adverse consequences to match. For that reason, its assembly and regular updates require focused effort and dedicated time commitments.
Why so important? In virtually each and every pursuit seeking expanded business development (new clients, contracts, etc.) and support financing at every stage, the business plan becomes the foundational piece from which bids, proposals, funding, and investments will all originate. Ask yourself some rather straight forward questions:
* Why should any customer, client, or company grant the enterprise a contract or offer a purchase order unless there exist “real world” proofs that the service/product/enterprise is the best suited to reliably perform and satisfy that need? Why should any capital or funding source provide financing or investment unless completely convinced and persuaded that such will be repaid with returns as anticipated?
Within the financing realms, never forget the “real world” precepts that rule money and business funding:
* He who has the gold maketh the rules. Unless that money source achieves a “comfort zone” with the enterprise (its product/services) the money will not leave the vault.
* Perceived risks rule the world of money. Either persuade the money source convincingly of acceptable risks versus reward/returns or funds will not flow.
In common business parlance, one usually gets three minutes or less for an “elevator speech” to convince (hopefully dazzle) and persuade. The truly effective business plan (as well proposals that originate from it) replicates those same effects/impacts on the very first page, preferably in the first few sentences or opening paragraph.
It’s a rather simple precept – given the opportunity, you either dazzle’em or die slowly danglin’ in the wind!