Hey there’s a lot of people who believe that the business plan is essential to obtain financing and plan your objectives. The truth is, it’s bullshit and a waste of time.
A business can grow and make profits even without that because it’s just a waste of paper.
A friend of mine works as an accountant for a large studio in Milan. He says he has never seen a start-up fail due to a lack of a business plan.
Many focus on creating a business plan, but it won’t make you understand much about your company.
This is why many people who want to be entrepreneurs start at a disadvantage; they have not considered what really matters.
THE FIRST MISTAKE OF BUSINESS PLANS
Let’s take pizza as an example, which is easy for me 🙂
Even though I am an almost millionaire entrepreneur, not a pizza maker.
A real pizza maker tries many times to make pizza; it takes a lot of practice to make a good pizza.
The business plan is too theoretical, based on hypothetical data.
This is well explained by Marco Sabatiello, an Italian entrepreneur who also collaborated with eBay Europe.
Since 2009 he has helped found 29 start-ups and has collaborated with more than 50 companies, some of them in the US.
“My alternative to the business plan is to collect real numbers and use them to involve partners, shareholders, investors, and lenders.”
This is what you need to do to find real numbers and goals; I mean, the ones you really need.
Here are some things recommended by Sabatiello:
1. Test your business idea
2. Find your business model (different than your business plan)
3. Test it on a small number of customers
4. Improve it
5. Test it on the rest of your customers
6. Find what is missing (money, staff, facility, machines…)
7. Now collect the numbers and complete a financial income statement with graphs and projections (this is the real business plan)
8. Search the investor with the experience you have
If you haven’t done these steps until now, you’ve now discovered why your business plan was just a waste of paper.
The business plan can also be useful, but the difference is in how you plan it; if you don’t know how to structure it, it’s better not to have it.
There is a reason why you need to focus on that list.
Look at these percentages.
INSTEAD, YOU SHOULD FOCUS ON THIS
Wasting time on the business plan by neglecting other things leads you to failure.
It’s like focusing too much on finding the best mozzarella to make the best pizza in the world.
Surely it will be very good, but if you are a bad pizza maker and you do not know how to mix water and flour properly, you will only make a lousy pizza with a tasty mozzarella; and in the end, this pizza will suck.
See what the CBInsight study tells us.
These are the reasons why startups fail:
– Market absence (42%)
– Funds depleted (29%)
– Wrong team (23%)
– Fierce competitors (19%)
– Incorrect or too expensive pricing (18%)
– Unsatisfactory product (17%)
– Wrong business model (17%)
– Ineffective marketing (14%)
– Poor attention to customers (14%)
– Product launch in the wrong period (13%)
Do you read “wrong business plan” or “lack of business plan” among these reasons?
Furthermore, Sabatiello says another interesting fact;
“You believe the business plan will get you funding, but 75% of the proposed ideas are discarded. Are you still sure it’s the right tool for your start-up?”
If it can’t even get you funding, it’s just wasted paper, because it is not based on real and tested data.
So here’s what you need to do.
5 KEY POINTS FOR YOUR STARTUP
Choose the right market!
If you don’t find the right market or niche, you are off track.
Everyone would like to have a universal product to sell everywhere. A product that is not hindered by geographical limits, age difference, or social belonging; in other words, a product immune to the targets. It’s impossible.
So instead focus on this and not on the business plan.
What do customers want?
By doing your homework right and doing proper market research, you will know exactly how to meet the needs of your potential customers.
Choose the best collaborators!
Doing business on your own is difficult.
Having one or more partners will help you compensate for your shortcomings.
Do not forget to make a plan for your business that indicates the duties of each collaborator; in this way, you will avoid a lot of conflicts.
The sad truth is that most entrepreneurs know their trade and not much else, but they often do their own marketing campaigns. This is so wrong!
Hire someone who really knows how to do it. He costs money, but if the person is the right one, he will create the right value.
Prepare for the worst!
To be successful in a specific job, it is not enough to have a good idea. You also need entrepreneurial experience; if you don’t have it, be ready, because in the beginning, you will have to work so hard.
Without real skills, you will be destined to struggle a lot in order not to fail.
Let’s sum it up:
A) The business plan is too theoretical.
B) If you really want to do one, you will need to do some tests and practice first
C) Only then can you use it to seek funding
D) Focusing on that is useless; startups fail for other reasons.
E) Focus on marketing, collaborators, the right market and be prepared to struggle.
I wish you a good adventure in the world of entrepreneurship!
Now if you want to read other absurd things and be really excited by cool stories follow my Twitter profile. Click here: https://twitter.com/SirNickNite.
Nico Nobili —Alias SirNickNite
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