When starting a new business, most entrepreneurs dream of success.
Let’s face it; if they didn’t, why would they even start?
But starting business is a lot of hard work. It’s one thing to have an idea that you believe is viable, but it’s entirely something else to turn that idea into a successful enterprise. There are many steps to go through when starting a business and, like everything, it starts with a plan.
It’s funny how many people shy away from creating a real, tangible business plan that is actually in a written format. Sure, lots of people spend a lot of time thinking about the steps to move their business forward. But without having something written down, it’s easy to miss critical elements of building a successful plan, and perhaps even worse, it’s easy to be seduced into thinking that success is yours for the taking.
We’re all familiar with the phrase “illusions of grandeur”. Simply put, it is the illusion that you have attained something grand. Did you catch that vital word in the previous sentence: “illusion”.
Without creating a solid foundation for your business, you truly will end up suffering from delusions of grandeur. Let me give you a couple of examples.
I’m familiar with a couple of startups that have been created over the course of the past year. Both of these businesses are founded on brilliant ideas but, unfortunately, both businesses also suffered from the lack of a fleshed out business plan. Both of these startups had evidence that there was a desire for their product, and both of these businesses were taking advantage of the technology of the mobile app.
One of these businesses hit the ground running and spent hundreds of thousands of dollars on the development of their concept. They had investors and they had their concept, but they blew through all of their money before they had proven their concept in the marketplace of the real world. They leased “brick-and-mortar” storefronts in three different countries, all before even getting out of the gates. In the case of this business, failure to develop a solid business plan, with a comprehensive marketing strategy, appropriate budget allocations, and a timeline resulted in the expenditure of hundreds of thousands of dollars with no return.
In the second example, the business concept again was based on something that was clearly desired in the marketplace. However, in this case we had nearly the opposite issue. Well over $100,000 was invested in this business, with the key difference being that the founder of this company was reluctant to bring in any investors due to the dilution of the founder’s ownership. Once again, the concept lacked the foundation of a business plan. With no budgets, no timeline, and no core marketing strategy, it became difficult to manage the requirements of moving the concept to market. As a result, the founder reacted with a series of knee-jerk decisions that simply ended up costing more money and bore no results.
So as you move your business forward in 2016, revisit your business plan to make sure that it is current. Things change, as do economic circumstances, so make sure that you are tweaking your business plan to reflect the realities of the times.
And if you haven’t written down your business plan, do that first! Avoid falling prey to the illusions of grandeur.
Until next time…
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