21st Century entrepreneurs and business owners are writing smaller business plans but doing more business planning. Verbs are becoming more important than nouns.
The founder of a new company recently received $6 million venture capital without providing investors the traditional 40-page business plan document. She instead used a 12-slide PowerPoint to communicate the case for her venture followed by a Q&A where she very capably answered all of the investor’s questions to their satisfaction.
She had no plan (noun), but she had done the planning (verb).
Rhonda Abrams, who shared this story with me, has sold more than a million books on business planning. On September 7, 2011, she shared what has and has not changed in business planning.
What has changed?
Rhonda said, “Writing is no longer as important as the planning process and activities.” Very few people take time to read a 35-page business plan. Instead, they read the 1-page executive summary.
What has stayed the same?
- Investors expect in-depth preparation by the business leader, e.g., what is your niche, who is your customer, how big is the market, what is the make-up of the management team? Leaders must know their stuff, inside and out.
- Business leaders must have financial acumen. They must be able to explain Financial projections for their P&L, Balance Sheet and Cash Flow report. Numbers are how we keep score.
- SWOT analysis … strengths, weaknesses, opportunities and threats is still neede
d. Plans must include inside and outside perspectives about the organization.
- Feasibility analysis is something new in Rhonda’s books. Do a feasibility analysis BEFORE developing a business plan. TMAC calls this step “Fail Fast, Fail Cheap, Get Smart”.
- Think globally. The internet now makes it much easier for a manufacturer to sell product internationally. TMAC and Small Business Development Centers have specialist who help American companies import and export product.
- Do more marketing and less sales. Peter Drucker said “Salesmen are a crutch for a poor marketing plan.” Every company should be using social media to market their products and services.
- Be socially responsible. B Corporations are replacing LLC’s and C-corps. B-Corps focus on the Triple-Bottom Line of People, Profit and Planet. For info go to www.BCorporation.net .
- Faster business plan presentations are best practice. No more than 12 critical slides and expectations of 5-year or less ROI’s for projects and investments.
What improvements have you implemented to your organization’s business planning process?