Starting a Business – Can a Business Plan Help Entrepreneurs Avoid Disaster?

A client recently shared his experience in finding a consultant to help him plan and launch his small business. He is a former high-tech executive with an MBA who is developing a small ethnic restaurant concept.

He began his search by calling several large restaurant consulting firms. Unfortunately, most had little experience with start-ups or little interest in working with one. The only firm she was interested in offered to sell her a business plan for $10,000. Although she could have easily paid the fee, she instinctively knew that buying an off-the-shelf business plan was a bad idea. Eventually a mutual business contact recommended it to me.

Working together over the past several weeks, we developed and refined your business plan, created a high-impact investor proposal, and spent considerable time reviewing the details of your business assumptions and resulting projections, all for well under $10,000. He literally experienced an immersion in the restaurant business through our relationship, including time spent at local restaurants learning about common management challenges.

Coincidentally, I recently wrote an article on the 5 Pitfalls of Starting a Small Business, which listed lack of proper planning as the #1 pitfall. With this in mind, I am deeply concerned to hear stories like this client’s. There are two fundamental problems here with the offer you received.

1. Premade business plans are basically useless. These days, it takes more than a pretty plan to secure funding and investment in your idea. Understanding the business you are entering is important to instilling confidence. You won’t get a deep understanding from a recycled business plan.
2. Buying such a plan is simply counterproductive. Making someone else do your homework when it comes to launching a small business is unwise. A business plan is merely evidence of the business planning process. It is the planning process that gives the entrepreneur an idea of ​​the industry, the market and the company that he wants to create. Skipping the process can leave an entrepreneur unprepared for success.

Such shortcuts remind me of a recent NPR report on the extremely high rates of car accidents in Russia. It seems that Russians, who don’t want to take driving lessons or study for exams, can easily buy driver’s licenses on their local black market. As a result, it has been observed that cities like Moscow have a large number of drivers who are not familiar with basic driving rules; which helps explain why they have twice as many fatal accidents as comparable US cities. In the end, whether you’re operating a vehicle or a business, proper preparation is important.