Tag Archives: business plans

The business plan paradox

“If you don’t have a plan, you can’t change it”

In my work with young entrepreneurs, we set great store by them developing a business plan for each would-be enterprise. I describe it as the key that unlocks further support – including a start-up loan and a business mentor. And it can. That’s the carrot for young people hoping to start their own businesses and the stick is… well… it’s me giving them feedback on their various drafts at 1-2-1 meetings. It has to be  their business plan and after each encounter, I  hope they won’t give up; no one is going to force them to stay the course. Of course, many end up ‘doing their own thing’ and we lose touch.

But then I have mixed feelings about business plans. They are, at best, an informed estimate about how things might turn out. We know they’re out of date the minute the ink dries on the page and they can be knocked sideways, backwards, and forwards by unforeseen opportunities and obstacles in the weeks following. Business plans chart 12 months ahead in a linear, orderly fashion (with words and figures hopefully describing parallel journeys) but we know that real life – personal and professional twists and turns – mean that’s unlikely to happen. We say that the business plan should be a ‘living document’ – dynamic and being constantly updated – but I wonder how many really are…

Then there’s my guilty secret – in the three years I spent setting up The Repair Shed (a social enterprise in Hemel Hempstead) my business plan lay unopened,  unloved, and out-of-date on the shelf. In fairness, I did have a 12-month project plan for the funders and I spent a lot of time explaining why things didn’t turn out quite like I said they would.

And yet… and yet …

Young people starting a business plan, and progressing it from one draft to another, shows learning in action, and achievement – massive achievement is some cases – that is credit-worthy in itself. Transferring ideas from inside heads on to paper helps make thinking tangible and, can often clarify issues and gaps in knowledge. A written business plan can share understanding between strangers about the young entrepreneur and their new venture. Even if the business plan is abandoned, it can be retrieved at a later date – a lifeline if the business is floundering, a leg up if the business was never started. And there’s proof that the author of a well-worked business plan can become much more employable as a result of that planning exercise alone.

There’s a much-quoted saying “no business plan survives first contact with customers” but I’d be happy with that – it says our young entrepreneurs have actually started trading!

Coming soon – 10 questions your business plan should answer  

Beyond the garden wall

IMG_8881“The grass is always greener where you water it” Neil Barringham

When I left book publishing in London after 15 years, I had a dramatic career change – working as a Community Enterprise Coordinator in the Cambridgeshire Fens. That beautifully stark part of the country is another world where, I was told, change happens by generations.

Like many relatively remote rural areas, if you aren’t born in the Fens, you’re an in-comer for ever. Imagine my situation then – I didn’t even live in Cambridgeshire, let alone the Fens, and the European Union was paying me to tell the local population who’d been there for generations how to live their lives. And I had absolutely no formal qualifications for the job.

I’d been advised that I had two advantages – I was male and mature. I’d never been described as mature before, but they were right; people did at least give me a hearing. But then on my third day in the job, someone said ‘you know Chris, we’re a terribly self-sufficient lot’. I knew I wouldn’t have people queuing up outside my door asking for help.

Then I got some great advice from a community development worker in Devon who’d been in the field (literally) much longer than my two weeks. She said, and this is the point of this blog…

“Think of yourself as a gardener, sowing seeds. You plant the ideas and if some of them sprout, you water them and nurture them. If they shrivel up, you know they’re non-starters and you plant other seeds in, you hope, more fertile soil. And don’t give up trying – it might just be the wrong time of the year.”

I found that advice amazingly useful over the following 18 months – it was an analogy that fitted the rural soundings and helped me explain my role to local people.

And then the gardening analogy cropped up (pun intended) when I was back in London working with the biggest and friendliest charity that’s ever been foolish enough to employ me.

In the course of advising people about business planning, I learnt about SHARE Community in south west London – a charity that provides training, education and personal development for disabled people and those experiencing social exclusion. SHARE Community’s CEO Annie McDowall describes a strategic planning day with a difference…

“To be honest, I was a bit bored with the same old format … SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. This was my first away-day with SHARE and I wanted to make it special. Also, I wanted to include a fair number of SHARE clients all of whom experience some level of disability…

SHARE has a horticultural project and we’re all very enthusiastic about it… How about we did a SWOT by imagining SHARE as a garden? We could use art materials to build up a picture with strength represented by trees, ladybirds and so on, weaknesses as weeds, slugs etc, opportunities as birds and bees, threats as greenfly – that sort of thing…

The next part of the planning session looked at what features of SHARE we wanted to keep and what to throw away. We kept the metaphor of the garden identifying what were weeds (to be got rid of) and what were hardy perennials (hold on to them). Next we asked each group to identify new garden features they wanted to introduce to SHARE. This was a really useful exercise because it produced a list of action points for the year ahead.”

Even though that planning session happened over a decade ago, it struck a chord with me as a brilliant idea. It’s remained in my memory because it connected at a higher level.

I’m pleased to say the garden analogy (or is it a metaphor? I never know) is still thriving – another intended pun. Just last week I read two blogs – from that wise man at Strategic Edge, Nicholas Bate, and the other was a 2013 blog post from another insightful writer – Seth Godin. Nicholas linked gardening to business, parenting and life, and in Seth’s blog he observes “Great projects start out feeling like buildings… but in fact, great projects, like great careers and relationships that last, are gardens.”

So plant seeds, grow well, and may your life, career and relationships bloom.

Further reading:

Nicholas Bate’s blog http://blog.strategicedge.co.uk/2016/01/mmmm-5.html

Seth Godin’s blog http://sethgodin.typepad.com/seths_blog/2013/07/gardens-not-buildings.html

SHARE Community’s gardening enterprise http://www.sharecommunity.org.uk/social-enterprise/share-gardening

 

 

Learning about Earning: lessons 3 and 4 from a social enterprise start-up

Project plan vs business plan

“Never present figures without a story, never tell a story without figures”

What’s the balance of words and figures in your plan (assuming you’re setting up or running a social enterprise)? Despite the pressure from all around to ‘be more business-like’ in my experience, charities are still good with words rather than figures, whereas organisations down the earning end of the ‘asking-earning’ spectrum use figures to tell their story (with the narrative in the background).

In my twelve months as a social enterprise start-up, I’ve had a business plan sitting on a shelf (almost complete, but weak on figures..!) and I revise my project plan every time I bid for grant support (three times – fingers crossed for third time lucky…) In all three cases, the application has been strong on words but, until the third application (when I got help) I’ve been weak on hard evidence in the form of figures (about scale of need, benefit and income) to make the business case.

If you want help to make the mental and physical – it’s as much about thoughts as actions – journey from asking to earning, try this http://bit.ly/1qFGGoJ

Planning vs doing

Cliche alert: ‘Fail to plan and you plan to fail’ andPiss Poor Planning Promotes Piss Poor Performance’ are over-used clichés that are a good excuse for not taking the plunge – talking about doing rather than doing.

Waiting to get all the jigsaw pieces in place and building firm foundations sounds like common sense, but what about (analogy alert) jumping in to test the water without having all your ducks in a row?  A ‘lean start-up’ can…

Motivate:  Having general discomfort can encourage us to go further, faster (you will run faster when chased by someone with a knife…)

Enable real market research: By launching the unfinished article in which you’ve invested relatively less cash and care, you’re more likely to respond to criticisms positively and adapt your product – which is what innovation is all about.

Reduce padding, increase focus: Without the luxury of unlimited resources, the new enterprise is forced to hone in on essential spending with a keen focus on purpose

Attract finance:  A shining business plan with figures to impress is just that – a plan and a promise – whereas hard evidence – of demand for new real products and services – counts for a lot.

More on the case for a lean start-up at http://bit.ly/1kjOsoT

 If you’re interested in exploring ways to turn ideas into action, join Chris Lee for a day-long workshop on December 4 in Chelmsford Details at www.voluntarysectortraining.org.uk/courses/event/70/Ideas-Into-Action

Enterprise essential – Make sure the figures add up

If you expect to spend someone else’s money when starting up an enterprise, the figures will need to convince them you have the potential to trade profitably. Solid research should help you present figures that will stand up to scrutiny (and save you a lot of time, money and stress in the long run!)

 

Enterprise essential – Balance the stories and figures

There’s a saying that you should never present figures without the story behind them, and never tell a story without figures. In a business plan for a social enterprise, the figures are more important than the narrative while, arguably, the reverse is true for a charity.

 

Running on fumes – a case for lean business start-up?


Month six of my year-long journey on the Lloyds Bank School for Social Entrepreneurs start-up programme. The creative environment at our monthly group learning sessions in Ipswich at the Eastern Enterprise Hub is always stimulating. Our last gathering got me thinking…

running-on-fumesStarting a new enterprise is always a balance between getting going and doing your homework first. Clearly having a sound plan and a solid funding base before developing a business makes sense, but could the ‘lean start-up’ approach be a quicker route to financial viability?

When I was at primary school, my mother seemed to be driving around on very little petrol much of the time. If I pointed out the petrol gauge was in the red, she would simply speed up – “to get home before it runs out” she’d explain.

Yes, pressure – to get home, to meet a deadline, to get a business up and running – can lead to irrational behaviour. But maybe real entrepreneurship means just that – cutting corners and taking risks (with due regard for health and safety) and doing things differently – however irrational and ill-advised it may seem at the time.

Bedford-based social entrepreneur Lynn Serafinn uses the phrase ‘running on fumes’ in an excellent blog post on social enterprise start-ups in which she passionately argues against letting your heart rule your head when it comes to money. But maybe, just maybe, there are benefits to be had from taking my mum’s approach to overcoming a shortage of fuel for the journey? Four thoughts on this subject:

Motivation: We know that in a dangerous situation, our adrenalin kicks in to enable physical feats – jumping clean over a sofa to avoid a violent confrontation was one such achievement for an unfit friend of mine. More general discomfort can also encourage us to go further, faster. I know a couple who built a house in just less than a year while living in a garden shed that was little bigger than the double bed inside it. Their friends decided to do the same thing – but while living in a nice, comfortable warm house. They were struggling to get their house finished many years later.

Real market testing: In his much-praised 2011 book The Lean Start-up, Eric Ries suggests that it’s a good idea to put a product out into the marketplace before it’s fully developed. Getting a product developed for sale at ‘just beyond pro-type stage’ will get more genuine feedback from purchasers than will more theoretical market research. Also, Reis argues, by launching the unfinished article in which you’ve invested relatively less cash and care, you’re more likely to respond to criticisms positively and adapt your product – which is what innovation is all about.

Less padding, more purpose: Without the luxury of unlimited resources, the new enterprise is forced to hone in on essential spending (assuming you have some objective ways of defining ‘essential’) with a keen focus on purpose; what are we trying to achieve? I’m currently watching a national programme of activity evolve through two broad development routes – top-down (the deluxe model) and bottom-up (the lean machine approach). A few years from now I’ll be intrigued to see which route has been the more sustainable and, ultimately, more successful.

Attracting finance: Even when seeking start-up funding, it may be a good strategy to get your business out there before you have all your proverbial ducks in a row. A social lender recently told me “proof works” when pitching for finance. A shining business plan with figures to impress is just that – a plan and a promise – whereas hard evidence, of demand for new real products and services, counts for a lot.

What do you think – is ‘running on fumes’ the way to go fast, or go bust?

References:

Lynn Serafinn’s blog post http://the7gracesofmarketing.com/2013/10/show-me-the-money-thoughts-on-social-enterprise-start-ups

The Lean Start Up by Eris Ries www.hive.co.uk/book/the-lean-startup-how-constant-innovation-creates-radically-successful-businesses/13291794

Funding your social enterprise with or without money www.theguardian.com/social-enterprise-network/2014/feb/10/how-to-guide-funding-your-social-enterprise