A good business plan is really essential for success but it really does need to be flexible. I say this because as your company grows the conditions will change and what is true today may not be applicable tomorrow.
The starting point for all businesses should be a good thought through concept about how you intend to grow your company. Most of my clients have been able to obtain financing from both banks and angel investors because of their business plans. You should plan to review your business plan periodically and revise those points that no longer apply.
You need to think about your business career as a journey and plan it like you would plan a long journey. Set a goal and when you reach that mile post set another destination or goal. Over a period of time you will be amazed about how much you can accomplish by using this simple strategy.
One of my favorite people is Barbara Corcoran. If you are not familiar with her you should be! She is one of the sharks on the television program call “The Shark Tank.”
Her story is amazing and her perception about business plans is interesting. I found this story on Fox News and I am posting it for you. I hope you find it as informative and interesting as I did!
Barbara Corcoran: Business Plans Not Built to Last
By Kate Rogers – Published May 20, 2013 – Fox Business
Barbara Corcoran is like a proud mama bear
Along the bright pink walls of her Park Avenue office are photos of the businesses she has invested in on ABC’s “Shark Tank.” These smiling entrepreneurs are a symbol of how far Corcoran’s own career has come—turning a $1,000 loan into a business she later sold for $66 million.
The entrepreneurs that have squandered her seed money and cost Corcoran are up there too—but their photos are upside down. But in true Corcoran fashion, she owns her successes and takes full credit for her missteps.
“I said yes to a woman who made oversize clothing for women—she was a fabulous salesperson. Charismatic and a great designer with all the right ingredients to have success on her hands,” Corcoran said. “But I wish I said no to her husband, who was as bad at business as she was good.”
And there went $50,000, in one week’s time. But the 14 other businesses she has invested in, out of more than 200 that have pitched her on T.V., have seen major growth and success.
“We do Skype calls, and I help find solutions to their problems,” Corcoran said of the mentorship role she has taken on with all of these businesses. “They are the lead, and I follow. I can help, only by virtue of the fact that I have been in business for 40 years.”
But before you come knocking on Corcoran’s door—or any other angel investors’ for that matter—she said she would rather see entrepreneurs dig deep in their own pockets and put some skin in the game first.
“Everyone is focused on finding the right angel investors,” Corcoran said. “The right people are themselves, I want to see how much money they can scrape together on their own. The reason is, that is the most valuable money, because you learn how to stretch it. And you will stretch every dollar.”
The next stop in the seed money tour should be to family and friends, because you also won’t want to squander that cash. Then, Corcoran said to look to crowdfunding, which she calls “the Big Kahuna” of venture funding. People who may not succeed in pitching on national T.V., for example, may be able to go viral on sites like Indiegogo.com and Kickstarter.com and raise enough seed cash to fund their dreams.
“It’s like ‘Shark Tank’ online,” Corcoran said. “You pitch to the population you want, and tell people the benefit of it. I saw one guy raise $50,000 to make a beehive—he was so strange, and I thought he wouldn’t raise a dime. These people gave him $10 and $5, and they got his first jars of honey. It’s so easy, but people skip that step.”
Another step this mogul says too many entrepreneurs wrongly get caught up on—the business plan. While it’s important to have this as a guideline, it has to be fluid and tested in the real world.
“Many of these entrepreneurs have a rock-solid business plan, that sounds so fancy,” she said. “None of the investors will trust this person, because they are angel investors that built businesses on their own, and know a business plan is nonsense. It’s the Harvard Business School way of thinking, and it doesn’t ever work. You get out there, and life happens.”
She says instead of hyper-focusing on a written rule, just starting living, and create your business that way.
“Entrepreneurs are left-brainers,” Corcoran said. “They often dream better than they write business plans.”
And for any entrepreneur considering taking an investment—even from the ‘sharks’ she sits next to on her show each week, Corcoran has her own cautionary tale. She was set to sell 55% of her own business for $50,000 in the late 1990s, but the deal fell through.
Four years later, in 2001, the market came back and that same business sold for $66 million. Even New York City’s reigning real-estate queen once misjudged her own value.
“Lucky for me, he got cold feet,” Corcoran said.