Business Plan Question

**CharlieB** · 06-06-2010 07:55 PM

Hi

I'm confused about business plans and i'd appreciate it if someone could help me. Firstly, how are you supposed to predict the future? I cant see how you can say in year 2 we will have this much revenue and so much in year 3. I know some people who run successful businesses and don't plan so why is it so important? Are there any websites or books I can read that will help? Also any links to sample plans would be useful, i've had a google but couldn't find too much.

Thanks

Charlie

**akula** · 06-07-2010 12:41 AM

hii charlie...
ok lets go through each one:

1. Firstly, how are you supposed to predict the future?
you are not. managers use forecasts in order to benchmark their performance and justify their salaries.
the forecast has no connection to objective reality. it's a subjective approximation.

2. I know some people who run successful businesses and don't plan so why is it so important?
For managers bplans are important because they are used to justify budgets.
For founders/entrepreneurs blpans are not important because the founder's job is different to that of a manager.
Instead of bplans, founders ought to use other tools which are more effective
No Plan Survives First Contact With Customers

3. Are there any websites or books I can read that will help?
yes, look in my signature for links to sites about entrepreneurship

4. also any links to sample plans would be useful
Business Plan Archive

**LadyBroker** · 06-08-2010 10:46 AM

I think business plans are important so you have something to guide you throughout the process. Especially during start up. Sure you can be successful without one, but I still believe the old saying rings true-- "If you fail to plan, you plan to fail". Even if your business plan is only 10 pages long, trust me-- you definitely need one.

**MirageGlobalMarket** · 06-08-2010 03:31 PM

Well the people who predict the future of their business already have a business that is making money. So they see that their revenue has been increasing the past years and they "predict" it will rise this many percent within the next few years.

**JKansas** · 06-10-2010 04:25 PM

You're not predicting the future, you're making an educated map for it. People often do them very quickly and they are not realistic. You have to look at market size, REALISTIC market share, growth or detraction.... so many of the variables. I have to say I find it all very helpful, although it can be time consuming. You will learn a lot about the innards of your business that you probably didn't know before you started. People rarely plan for things like all of your insurances (workers comp, liability, surety bonds etc.), licenses, local codes and costs (certain districts charge association like dues), etc. By researching and properly planning these things you can make your financial projections a helpful map. That said, don't go too crazy, you will most likely be wrong! I was! But I learned a lot in the process and we are still going.

Revenue projections are based off of what you think you can do. Are you building t.v.s? Selling sushi? If so, how many rolls can each chef make, how many does yoru space hold? What is average time turnover for seats? How many chefs do youplan to hire? What do you expect yoru occupancy percentage to be?

It's not expected to be perfect, it's expected to make you think about, and show what, your business is capable of. If you can't think in depth about yoru business like this and answer these questions you will have a tough time.

You're correct, there are successful people who never had a business plan, there are a lot of failures too. Putting it on paper helps others to see yoru vision. But whether you have it on paper or not you need the plan.

**MirageGlobalMarket** · 06-10-2010 05:21 PM

Originally Posted by JKansas

You're not predicting the future, you're making an educated map for it.

That's still a prediction, regardless of what educated guess and variables you look at. It's always a prediction. But the more information you attain makes your prediction more likely to be plausible.

**JKansas** · 06-10-2010 07:35 PM

My point is that's its a little more complex and academic then looking at sales and guessing a number. You're not reading palms or teas leaves, you're looking at your business and it's environment and your abilities and taking this all into consideration. And I disagree with you, it's not just those that already have a business doing the predicting. A business plan is, in my experience, required now to secure most oustide capital.