Page 9 - How To Avoid Going Bust In Business

But don’t feel that it’s cast in iron and can’t be changed. A good business plan, like a
good budget, is not graven in stone. It’s a dynamic document that changes as the
business environment changes.

Here’s an example: Suppose you figure that busy people have a problem in
deciding what to cook for dinner and finding the time to shop for it. Solution: A
business which every week sends out a container of food ingredients and the recipes
to go with them.

Great idea. You figure in the first year you might be doing 300 customers a week.
Instead you quickly get up to that number and start feeling the pressure of getting all
done and out in time.

Do you now say “The business plan said 300 a week, so that’s where we stop”? Or
do you say, to hell with the business plan, “Let’s go for it. We’ll hire more staff, get
bigger premises”?

(Incidentally there’s no right or wrong answer to that. Your decision would depend
on many things. Work/life balance not least among them.)

A good business plan has several components:

1: The executive summary. This is a down-to-brass-tacks summary of the whole
document. You’ll usually write it last, but I have to say that on one or two occasions I
have written the summary first in order to refine the concept before I fleshed it out
into a full-scale plan. That’s usually because I have had this wild idea and I needed
to explore it first.

The usual result is that I conclude it was a dumb idea in the first place. Best not to
waste any more time on it.

2: The problem. What is the customer’s problem that you are trying to solve? It
might someone who feels they are overweight – look at the enormous expenditure
on diet and health programs.

It might be a harried house-person who can’t be bothered cooking tonight and
doesn’t want to go out to get take-aways. Enter . . . Uber Eats.

It might be “How can I make a few bucks by renting out the spare room in the
house?” Answer: AirBnB.

Basic proposition: Unless there’s a problem to solve, you probably don’t have an
opportunity.

For instance: What problem does this book seek to solve?

Simple. Many people have a great business idea but lack practical business
experience and therefore don’t know how to get it off the ground and keep it flying.

This tome, then, should walk them through the steps that will give them the best shot
at success, or at least minimise the effects of failure ‘cos not every idea is a winner.
Bit like Kenny Rogers in his song The Gambler: Every hand’s a winner and every
hand’s a loser.