Post by Kristy Straka, contributing Women On Business writer
Most people in business believe that you should make a business plan and “stick to the plan”. I disagree with this philosophy completely. When you imagine your exciting new business most of you imagine it as a business that will be great . . . people will love it, and you will be successful. That’s great because you have to believe in your business.
However, when you develop your business plan there are many facets to it. Some of these are your limitations, barriers to entry, risks, and the question of who your competitor really is.
When I first developed our business plan for the Mobile Dental Lab on Wheels (DLOW), there were no other mobile labs anywhere in the industry. Those you might see in the industry right now are those entrepreneurs who purchased their business from Vorofco, and we licensed them to develop their own brand so now there are more.
I was asked one day who my competitor was, and my response was “no one!” Well that is an answer only a foolish person would have said. In my mind I knew that there were no other mobile dental labs in the industry so therefore, I proudly listed my competitors as ‘none’ on my business plan and presented it to seasoned investors.
The fact of the matter is that I have plenty of competitors out there. The traditional lab industry is a multi-billion dollar lab industry. Yes it takes two to three weeks to get a crown back from the lab, but nevertheless, they are my competitor. There are also dentists who own their own CAD/CAM units and will not use the mobile service, and there are labs that send their lab technicians into dental offices to work on a patient alongside the dentist.
Yes, I did have competitors! I showed our business plan to many potential investors before someone stopped me dead in my tracks and gave me a reason to rethink my competitor analysis. Once I did, I was able to come up with a sales presentation for potential clients that would one-up the competitor. Instead of telling dentists that I didn’t have any competitors, I told them who they were and why we were a better fit then I made the first revision to the business plan.
I was able to easily come up with ‘barriers to entry’ because this was an entirely new business industry and had never been done before, but scheduling was not one of the issues which turned out to be our main obstacle.
Could we maintain a schedule? What if the dentist was running late? What if the patient was running late? What if we had back to back appointments and we couldn’t be late? What if husband and wife booked back to back and cancelled at the last minute? What if my best client had an emergency and needed the DLOW right away? Scheduling was definitely a barrier to entry that I hadn’t given a great amount of thought too so I made the next business plan revision.
I could go on and on about how different your business plan will look in its developmental stages compared to what the business plan will look like six years later. I can now answer ‘all’ of these questions without referring to the business plan because I now know the objections that I didn’t know in the beginning. I’ve lived the business, jumped the hurdles, and solved many issues over the past six years.
By writing down your risks and barriers to entry on your business plan, you can use this tool to solve issues. You will eventually be able to eloquently speak well about the solutions you have developed to combat them both and you will sound like a professional because you will have lived your business.
Your business plan is your first marketing tool. It makes you think! It allows you to think past the excitement and the feel good feelings that you have about your proposed business.
You initial business plan should be reviewed and updated every time there is a change in your business ideas, your concept, marketing strategies, proposals, objections, and solutions, etc. If you continue to make these changes, your business plan becomes your marketing manual, but once you think you have it all figured out, someone will come up with something new.
Being in business means to be ever changing and adapt to the changes that present themselves to you. The challenges you might face in financing your business or other obstacles may lead you to alternative solutions that you might not otherwise explore. Be adaptable . . . start with the basic business plan, but continue to change it and revise your dates as you make your changes.
I believe that if your business plan ends up following the exact path that you have mapped out for your business then you have most likely missed critical opportunities which you might have otherwise embraced.
Michael Conwell says
I could not agree more. I believe that a business plan and a strategy plan need to be more fluid. I do a lot of consulting to small business and new entrepreneurs and I repeat myself on a regular basis on how companies, especially new one’s need to be more flexible when first creating their strategy and business plan. One large client and/or one great partnership may change the outcome of both.
Mark Loschiavo says
Thanks for the post. I agree. I often tell the many entrepreneurs and students I work with that the business plan changes the minute it is introduced to the market.
Having said that, I find that most companies have the opposite problem. Instead of refusing to make adjustments to the business plan when needed, they take on the characteristics of a Golden Retriever in a field of butterflies–jumping from one opportunity to the next with reckless abandon.
Daljeet Sidhu says
Thanks for writing an insightful article. As an entrepreneur and co-founder of Tradeseam, a B2b network, I have seen our business plan change radically over the past few months. We would have been out of business if we had not adopted new ideas as we developed the product.
A word of caution though. Changing your business plan does not mean reckless pursuit of opportunities. For an entrepreneur focus is also important.