Really, you’re comparing business plans to cars? Why? Just, why?
If you’re into cars, by this stage you may already be trying to name a make and model that corresponds to your company plans. But I confess that I’m not a motor buff, so this article will not be comparing brands or technical specs.
I think of cars more in terms of how useful they are in my life, and how easy or hard they make it.
And that can be a useful lens to inspect your company strategy as well. Is your business plan working well? Or is it due for a service and MOT? Or even an upgrade to a better model? Cars don’t last forever, and neither does your first shot at a business plan.
Which of these types of car does your current business planning most resemble?
Mum and Dad’s car
When I was a child, I had no idea or interest in how our car worked. I just wanted to arrive at the destination quickly. As the youngest, I was always the one in the middle of the back seat, sliding around on the plastic seats and being elbowed by my sisters.
Similarly, when you are an employee, you rarely have any influence over the strategy of the company you work for. Instead you have to accept all the quirks and irritations. You may grumble about the journey, but at the end of the day you do hopefully finish up where the company needs to be.
Like a teenager desperate for their first car, many people decide to start a business because they are fed up of having the destination decided for them.
That heady taste of freedom
Our first car was a wonderful thing. My parents were now 50 minutes away, instead of more than 3 hours with 3 trains and a long walk. We spent all we could afford (which wasn’t much) on a beige, 8 year old Rover Metro. We weren’t quite sure about the guy we bought it from, but it looked okay to our untrained eyes.
When you think about starting up a business, your plans may consist of a few thoughts on the back of an envelope. Or perhaps some conversations with friends, whose opinions may or may not be trustworthy or well-informed. This is great for a while, but it only gets you so far.
The problem with our cheap and cheerful car was the mounting repair bills. We couldn’t afford to get the heating fixed, so it was always freezing. But we couldn’t ignore the growing line of rust under the passenger seat, or the nagging suspicion that if we looked too hard we might discover our car was in fact two cars stitched together like a Frankenstein’s monster.
Is your company strategy like this? It seemed okay at the time, but without training or experience in these things it’s hard to tell. You have nothing else to compare it to, so you go with it and hope it works.
If your business plan is still on an envelope in a drawer somewhere, chances are that you may not reach your destination without crashing.
5 doors! What luxury!
We found the money to upgrade our car when I became pregnant and we wanted something with seatbelts in the back. Our aspirations were still not very high. We just wanted basic safety features and a little bit of comfort.
If you are serious about starting your own business, a one page business plan can be really valuable. It clarifies your thinking and makes sure you have thought your idea through before you launch into it. It then helps you explain your plan to other people, and guides your marketing. All without reams of paper and weeks of work by a specialist consultant.
Try this template, adapted from one provided by The Women’s Organisation for startups:
Add to this a basic financial spreadsheet including cash flow for your first 12 months, and you’re good to go.
Stepping up your aspirations
Over time, we found the flaws in our new car. Like its tendency to overheat in traffic jams, which spectacularly resulted in a breakdown in the lion enclosure at a safari park when the car in front of us stopped for too long to take photographs.
Once you start thinking about recruiting people or looking for external investment, take another look at your one page plan to see where it needs expanding. Potential investors will tell you what information they require, but add your one page plan even if they don’t ask for it. It gives confidence that you know what you are doing, which increases your chances that they will agree to lend you money or buy into your business.
I love my current car. It has air conditioning and cruise control, which I never even dreamed of when we bought our first car. It’s not especially fancy by today’s standards and it’s now 7 years old. But it’s light years away from that early Ford Metro (or possibly two Ford Metros), and it suits my current needs well. It is safe, cheap to maintain and comfortable to drive. And it accelerates nicely too, which I do enjoy!
Does your current business plan still meet your needs and provide enough safety and comfort? Even better, does it still help you to accelerate when you want to? Is your cash flow planning integrated into your accounts and easy to use on a regular basis?
Planning for success
Without training in car maintenance, it’s hard to see when a car is in fact two cars. And without training in running a company, it can be daunting putting a business plan together.
In hindsight, it would have been cheaper to get some advice that first time we went car shopping. If this is your first time planning for your business, it may be cheaper in the long run to get some help reviewing your business plan to help you spot the things you’ve missed. If you don’t think about your market or your costs properly, you can lose a lot of money chasing an idea that is never going to work.
Help yourself to the free resources on this site to get started in your business planning. And if you would like more personal assistance, give us a call on 07923 259910 for a free, no-obligation chat to see how we can help you create a business plan for success.