Q: I know lots of successful entrepreneurs who never had a business plan. Why should I do one?
Q: I’m eager to get started on my business – I worry that if I take time out to do a business plan I will miss out on the opportunity that exists in the market place right now. The early bird catches the worm right?
Q: I want to be independent and own my own business but I’m lazy. Is buying an existing business easier in the long run?
Q: I want to start my own business but I don’t think I want to start a business based on my hobbies. I like fixing up cars but if I choose this as my business it will be work and no longer fun. Is it okay to start a business in a field I’ve never worked in?
Q: I have several business ideas I want to pursue. How do I choose the right one before getting too far into the research?
Q: I know lots of successful entrepreneurs who never had a business plan. Why should I do one?
In every workshop I do there is at least one seasoned entrepreneur stating that they have “owned 6 businesses and never had a plan” and many similar such claims. I would say that no business starts without a business plan of some sort, whether it’s written on the back of a napkin or simply in the mind of the entrepreneur. There IS always a plan, whether it includes few words, is not written, is not supported with credible financial tables, and even if it’s never done to presentation quality.
That said, there is a wealth of benefits to anyone develops a business plan. The benefits far outweigh any negatives. Here 11 ways you will win by taking the time to develop a business plan:
- You know where you’re going
- You will have a roadmap or blueprint for your business
- You will have a document to look back on in order to measure your progress
- A plan will help protect your investment and equity from loss
- You will find out if your idea will work
- You can discover and solve problems before starting the business
- You will build confidence in your business idea
- The plan can help you get financing
- You become the expert for your business
- You will prove your business case
- You will have a document to use for communicating with others, family, partners, investors, bankers
Knowing this, why would you not do a business plan?
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Q: I’m eager to get started on my business – I worry that if I take time out to do a business plan I will miss out on the opportunity that exists in the market place right now. The early bird catches the worm right?
As a fellow entrepreneur, I feel your pain…
Opportunities flow through our lives every day. What’s truly in short supply are folks who have what it takes to nurture and bring the opportunities to fruition. When faced with a great deal that might disappear, it’s tempting to cast away your common sense and jump.
If you have business experience and enough of the pieces in place, you can certainly do the business deal and then do your business plan on the run. With experience and knowledge some people are able to leap successfully. However, the business failure and bankruptcy statistics tell us that high percentages of businesses fail in the early stages. The problem is that if you don’t have the right information and you misstep, you could lose your investment in the business plus a whole lot more.
Some opportunities are time sensitive and demand quick action, and for those situations we recommend that you follow your heart. But if your eagerness is all that’s urging you to skip a business plan, we suggest to you seek ways to buy time to do your due diligence. Ultimately, you are the one who will shoulder the liability for any business deal you involve yourself in, so to that end we suggest you do your research and proceed cautiously.
First preference – take the time to do a business plan.
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Q: I want to be independent and own my own business but I’m lazy. Is buying an existing business easier in the long run?
There are a few advantages to buying a business rather than starting from scratch. In a perfect world, buying a business will give you a leg-up in that the deal comes with a whole whack of customers and you don’t have to invent everything from scratch.
If by “lazy” you mean you hope to maximize the value gained for your energy output, we understand. And we know you wouldn’t be considering business ownership if you were truly lazy, you’d be looking for a job.
Whether you build or buy, there’s a lot of work to be done, and the lion’s share of that work is in the day to day operations, serving customers and keeping them happy. A couple of points to note . . .
- There will typically be more work up front to starting and building a business than stepping into a going concern
- A going concern, providing you have the money to invest, will usually require less set-up work up front
- Buying an existing business will never guarantee success – as a new owner, you will still have to perform to keep clientele and earn profit
- Whether you buy or build, you will still have to do your due diligence in order to sleep well at night
Honestly, I’m not sure either way is easier – it’s more a matter of how your wish to spend your time. Would you enjoy the thrill of building a business or might you prefer to step into an operation that someone else has already built?
If you’d like to read more about buying a business check out the article at http://www.riskbuster.com/blogs/dan-boudreau/thinking-buying-business-buyer-beware
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Q: I want to start my own business but I don’t think I want to start a business based on my hobbies. I like fixing up cars but if I choose this as my business it will be work and no longer fun. Is it okay to start a business in a field I’ve never worked in?
If you love fixing up cars before starting your business, you will probably love fixing up cars afterward as well. If it’s important to you to spend your time doing something you love, it seems logical to get into a business that results in you doing tasks you enjoy. If you really enjoy what you do to earn your living, it tends to be more play than work.
Perhaps a more difficult issue is that those who start businesses based on hobbies, discover later that their job has drifted away from doing the hobby that motivated them to start the business in the first place and into spending most of their time on tasks they don’t enjoy, such as marketing, sales, bookkeeping.
While it’s fine to start a business you know nothing about, recognize that you will probably have to shoulder the risk yourself. Entrepreneurs do jump into business ventures they are unfamiliar with, but understand that it’s going to be more difficult to entice others to finance such a venture. Also, if you’re planning to leap into unfamiliar waters, do what you can to educate yourself as you go – take courses or workshops, work in the business for a while, join the appropriate associations, watch videos, etc.
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Q: I have several business ideas I want to pursue. How do I choose the right one before getting too far into the research?
Selecting down to the right business idea can be both agonizing and fun. The answer will vary, depending on who you are and what your personal goals and needs are. Whatever might follow, this part of the process is sure to get you busy. We recommend the following ideas to get you on the path to a decision.
- Read books or articles on each business idea.
- Subscribe to e-zines for each business idea.
- Interview people who currently work in or own the type of business you are considering. Learn whether or not they are happy with the business, what they like or dislike.
- Visit businesses of the type you are considering, hang out if you can, get a feel for what it might be like for you once you’ve begun.
Once you’ve done some early research on each business idea, write a list of what you like and dislike about each and compare them to assess which appeal most to you. If your selection narrows to more than one, you might do quick feasibilities on each to help get closer to a decision. Quick feasibility studies are a easy way to determine if the business might meet your basic financial goals and be profitable.
Ultimately, the decision of which business to get into comes down to what’s most important to you, how you wish to spend your time, and how much money you need in order to survive.
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