Death by Business Plan!

I recently asked my good friend and Mindsheet associate, Christopher Chadwick, to share his thoughts on the value of the business plan. It wasn't quite what I expected, but it's certainly a frank assessment.

"Do you ever get that horrible sinking feeling that goes to the pit of your stomach when you've got to do tedious bureaucratic stuff that adds no value to anyone least of all you?

So if you've got an exciting business idea that you want to get off the ground fast why not completely kill it by filling out a business plan first?

Over the last 20 years or so, I've written more business plans that it's fair to throw at a convicted criminal (ok, maybe bankers put aside).   Do you know how many got read cover to cover?  Spot on, absolutely ZERO!  Now you may say that's because I can't do them and you could be right.

However I've done them in start-ups, early-trading companies and working for large corporations such as Amex, Cadbury-Schweppes and Cable & Wireless.  And a fair share of the proposals actually got funded - but … it wasn't down to the business plan.

The fact is that for some dumb reason investors, VC's, bankers and corporations get a lot of comfort out of seeing business plans - glossy, 80-page, pie-chart-filled carbon-wasting pap.

Why?  Because they can touch and feel it and believe that unless you're prepared to go to such lengths you can't be committed to your proposition.

So here's what you do if you've got a great business idea that you want to take to market.

Firstly, don't start with the business plan - only do it when you've figured out:

• Do I have a clear customer proposition?
• Do I know exactly who represents my first core market segment?
• Is my proposition compelling?

Some see business plans as road blocks on the runway to commercial success.  If you're the dude having to do it then it's a pain in the gluteus maximus.

So please, do yourself a favour and do the essential stuff first.  Because if the customer proposition's not great and you're not clear on your first market 'beach head' then even a brilliant business plan crafted by Ernest Hemingway isn't going to save you".

Chris Chadwick has worked at director level in companies as diverse as Cable & Wireless, The Burton Group, Amex and PPP Healthcare.  He was Chairman of Denplan Ltd, Director of the Leeds Building Society and Managing Director of Guardian Direct.  We first met when we worked together at De La Rue, where Chris set up a the Global Services division.  My thanks to Chris for this contribution. It certainly struck a chord with me!