Business Success: Can a business plan help entrepreneurs avoid a major disaster?

A client recently recounted his experience searching for a consultant to help him plan and launch his small business.  He’s a former high tech executive with a masters degree in business administration, who is developing a small ethnic restaurant concept.

He started his search by calling several large restaurant consulting firms.  Unfortunately,  most either had little expertise with start-ups or little interest in working with one.  The one firm that was interested offered to sale him a business plan for $10,000.  Although he could have easily afforded the fee, he knew instinctively that purchasing an off-the-shelf  business plan was a bad idea.  Eventually, he was referred to me by a mutual business contact.

Working together over the past several weeks, we have developed and refined his business plan, created a high impact investor proposal, and spent considerable time reviewing the details of his business assumptions and resulting projections – all for substantially less than $10,000.  He has literally experienced an immersion into the restaurant business through our relationship, including time spent in local restaurants learning about common management challenges.

Coincidentally,  I recently wrote an article on the 5 Pitfalls of launching a small business, which listed failing to properly plan as the #1 pitfall.  With this in mind, I am deeply concerned to hear stories like the one from this client.  Here are two fundamental problems with the offer he received.

1. Pre-done business plans are basically worthless.  These days, it take more than just a pretty plan to secure financing and investment in your idea.  Understanding the business that you are entering into is important to instill confidence.  You won’t get indepth understanding from a recycled business plan.
2. Purchasing such a plan is simply self-defeating.  Having someone else do your homework when it come to launching a small business is reckless.  A business plan is merely evidence of the business planning process.  It is the planning process that gives entrepreneur insight into the industry,  market, and company they want to create.  Skipping the process can leave an entrepreneur unprepared to succeed.

Such shortcuts remind me of a recent NPR report on the extremely high automobile fatality rates in Russia.  It seems that Russians, who don’t want to take driving lessons or study for exams, can easily purchase driver’s licenses on their local black-market.  As a result, it has been  noted that cities like Moscow have large numbers of drivers unfamiliar with basic driving rules; which helps to explain why they have twice the number of fatal accidents as comparable American cities.  In the end, whether it’s operating a vehicle or a business, proper preparation matters.

About the Author

Shed Wallace is a Restaurant Management Expert, Senior Consultant: www.EateryCoach.com, and Author: www.EateryTribe.com. To submit questions email Shed at: askeaterycoach@gmail.com

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