The Self Taught MBA: Business and Strategic Planning, Part 1 - Best Laid Planscomments (4) April 18th, 2012 in Blogs
If you're a builder, chances are you didn't start your business with a formal plan. Most of us start with a few years in the trade, some tools, a truck, and maybe a box of business cards. I didn't have cards. I made up flyers and ran around town slipping them into mailboxes. By the time I got back home, the phone was ringing and thirty-five years later I'm here writing this blog, having made my living for a lifetime in construction and real estate development. Along the way, I have written three, large and very formal business plans with paid consultants, and countless small, project-specific business plans. They all had one common purpose; it was to entice a bank or investor. Much later I realized the internal value of a business plan-and it is nothing short of a pause in the business routine to appraise where you are, and where you're headed.
Many books describe the classic business plan, but most are geared for manufacturing, technology or retail startups seeking investors or a loan. You may not be looking for capital, but the planning process itself and the feedback you will elicit by showing your plan to trusted colleagues will help you to refine and focus your efforts. The most useful plans are drawn up as dispassionate self-analyses. It's too easy to spin a business plan into such a good sales presentation that you convince yourself in the process. Better to approach your business plan as if you were the disinterested third party, a skeptical investor trying to decide if your venture is a good risk. What would you want to know about the business, the manager and the market?
To start, you'd want to know the basic service offered by the business. If it's a very general service, such as "remodeling and construction, no job to big or small," you may question the viability of such an approach, given an oversupply of contractors in a recessionary environment. If, on the other hand, the business plan offered a tight focus, such as "basement waterproofing," or "residential energy efficiency upgrades," you may have a concern about how many potential customers need or want this exclusive service in your market area. Neither approach is bad, but each raises its own set of questions.
It's in the asking and then answering of these questions that you can look intently and analytically at what you're doing to form realistic expectations. Someone recently commented on this blog, saying he hope to hear, "…advice on how to scale up the business so I can have a life away from the day to day operations, yet maintain customer satisfaction and profitability in a seasonal business." Well, a business plan can answer this question, but it may not be the answer you were hoping for.
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