Are business plans a total waste of time?

A survey carried out by business software provider Exact suggests that more than a third of the UK’s 4.9m SMEs don’t have a business plan and “they could be missing out on an extra 20% of profit as a result”.

Of the 34% of respondents who didn’t have a business plan, 68% said they didn’t see the need for one, while 23% were “too busy” to prepare one, 8% “didn’t have anyone to help them” and 5% “weren’t comfortable with numbers”.

Should we be surprised by these findings and are business plans as essential as some start-up experts would have you believe?

Some experts would tell you that start-up business plans aren’t worth the paper they’re written on

Waste of time

Some experts believe start-up business plans aren’t worth the paper they’re written on. Author Paul B Brown, wrote a piece for Forbes.com called Why Business Plans Are A Waste Of Time., after he came up with the idea for a new book that sought to offer insight from the original business plans of highly successful US entrepreneurs.

But there was a problem. As Brown explained: “Most of the business plans had nothing to do with what the businesses eventually became. People who said they were going to specialise in developing new computer hardware ended up in software, for example. In a surprisingly high number of cases, what was in the business plan ended up having very little to do with what the company ultimately became.”

After writing about entrepreneurs for more than 30 years, Brown believes that creating a “painfully detailed business plan really doesn’t make much sense. The first time you encounter something you didn’t expect, the plan goes out the window. Things never go exactly the way you anticipate.”

Some of the heroes of today’s would-be entrepreneurs, such as Steve Jobs, Bill Gates and Michael Dell, did not have business plans when they embarked on ventures that changed the world

Business plan myth

A few years ago, (“former banker, small-business investor and veteran entrepreneur”) Kate Lister wrote a piece for Entrepreneur.com called Myth of the Business Plan. She highlighted research from Babson College (“regarded as having one of the top entrepreneurship programs in the country”), which found “no statistical correlation between a startup’s ultimate revenue or net income and the supposedly requisite written business plan”.

The study found that: “”Some of the heroes of today’s would-be entrepreneurs, such as Steve Jobs, Bill Gates and Michael Dell, did not have business plans when they embarked on ventures that changed the world”.

Great business plans may earn you an A in business school, but in real life you only get As for achievement

Lister said she was “all for having a business plan in the verb sense. I’m just not a big believer in the noun form”. She continued: “Writing a formal business plan invites the paralysis of analysis. It distracts the entrepreneur from slaying dragons and thinking big thoughts. And it’s largely a waste of time. The result usually is a long-winded missive that’s out of date almost the moment the ink dries. Great business plans may earn you an A in business school, but in real life you only get As for achievement. So stop dotting your i’s and crossing your t’s and go out there and slay something.”

Success Plan

Andy Fox is the founder of “award-winning independent car service and repair specialist” iAutoUK. He wrote an article for the Huffington Post called “Why You Don’t Need a 40-Page Business Plan to Launch a Successful Company” (sic).

“I’ve never had a business plan,” he admits. “Despite this, in three years my company has reached a turnover of over £1m, with £100,000 annual profits. For your business to thrive you instead need a ‘Success Plan’. This is an evolving strategy consisting of three elements. No 40-page business plan needed. In fact, you can write a Success Plan on one sheet of A4.

Look at companies such as Comet, Blockbusters and Jessops. I’m sure their business plans didn’t include going into administration!

“Firstly, you must understand your market place and how your business is distinct from competitors. Secondly, the Success Plan must have ‘Leader’s Objectives’ and you must communicate them to your staff. The final element is to make sure you make money! You must have a system that provides you with daily earnings information, and which can monitor cash in the bank and in the pipeline.

“Such a Success Plan is a short, relevant, real-world document. I believe a Success Plan is more appropriate than a traditional business plan.” Dryly he adds: “Look at companies such as Comet, Blockbusters and Jessops. I’m sure their business plans didn’t include going into administration! Had they had a Success Plan, perhaps their futures may have been different.”

• This blog was commissioned by Atom Content Marketing and appeared originally on the Start Up Donut website.

Negotiating: 10 ways to get better results

Negotiating isn’t extraordinary, of course. It’s something that most of us do many times each day, whether formally or informally, in our business or personal lives.

Some of us are natural negotiators, while others struggle. However, negotiating isn’t simply a question of enforcing our will to get what we want.

Sometimes you get more than you expected; sometimes you have to settle for less than you wanted

Negotiating involves trying to reach agreement. Sometimes you get more than you expected; sometimes you have to settle for less than you wanted. Negotiating is about finding a solution that’s acceptable to both parties, which is why some negotiations take so long or why they ultimately prove fruitless.

So, what’s the key to getting better results when negotiating?

1 Be well-prepared

Proper preparation is key. You must know what you want from the negotiation, what your alternatives are and what you’ll concede if asked. You also should try to understand what the other party wants, what they’d give up and what their other options are. Ahead of the negotiation, practice answering any questions you’re likely to be asked and make sure you can back up all claims you’ll make, because it could strengthen your negotiating position.

What works in some cases may not work in others, so take time to decide the right approach 

2 Use the right negotiating strategy

Good knowledge of the other party can enable you to know how best to approach the negotiation. Your strategy will be slightly or entirely different for different people and situations. What works in some cases may not work in others, so take time to decide the right approach to take in each instance. 

3 Choose the right time and place

You need somewhere free of interruptions, where both parties can talk openly. Make sure there’s enough time for the negotiation, so that deadline can’t be used against you. Very early on, explain what you hope to achieve, but don’t reveal concessions you’re prepared to make, because these must be negotiated.

4 Believe in yourself

Lack of confidence will undermine you when negotiating. If you’ve prepared well, know what you want and have a sound strategy, you should feel confident. Also make sure that your appearance and body language is right. Be firm but fair when negotiating. Speak clearly and with authority, but remain open to questions and comments.

Don’t issue ultimatums or allow things to get heated. Stay cool and don’t take things too personally

5 Stay calm and keep it friendly

Negotiations should be friendly, with both sides professional, polite and respectful. The tone shouldn’t be adversarial – aim to build bridges not walls. Don’t issue ultimatums or allow things to get heated. Stay cool and don’t take things too personally – even if the other party is rude or overly dominant. Smile and stay focused.

6 Be a good listener

You must carefully consider the other person’s point of view if you’re to reach an agreement. Don’t talk at or over them, instead, seek to create and sustain a good conversation. Also be patient, because negotiating can take time, especially when matters are complex or the stakes are high. During the conversation, if you don’t understand any points, seek clarification.

Don’t allow yourself to be bullied into revealing your bottom line too early on

7 Be prepared for negotiating tactics

Experienced negotiators employ various tactics, especially when buying or selling. Be prepared for someone to play tough, but don’t allow it to affect your confidence or determination. Don’t allow yourself to be bullied into revealing your bottom line too early on. There should be some room to negotiate on the other party’s opening offer.

8 Concede ground when necessary

But ask for something in return. So, if they want a cheaper price, agree only if they buy more from you. If they want more credit, try to ask for a higher price. Where possible, avoid giving concessions unless you get something in return. And never appear desperate, because it can weaken your position severely.

Drive a hard bargain, but remember – the deal must be fair for both parties, if the relationship is to last 

9 Seek concessions when possible

If you feel you’re in strong position and close to agreement, try asking for concessions, but only if they offer real value for your business. If you’re buying, by all means drive a hard bargain, but remember – the deal must be fair for both parties, if the relationship is to last. 

10 Walk away if you can’t agree

No deal really is probably better than a bad deal. If you want to consider an offer, ask for more time. If no agreement looks likely after there has been sufficient time to talk, politely end the negotiations and part on good terms. They might later make more concessions to rekindle your interest. If you can’t come to an agreement that works for your business – explore other available options.

• Blog written by Dead Good Content founder, Mark Williams.

Bake Off business lessons: What are the key ingredients for success?

We love The Great British Bake Off in our house. We tune in every week. Reportedly, more than 10.8m viewers watched the first episode of the 11th series when it aired in September (6.9m viewers watched it live, the rest caught it on, erm, catch-up). It was Channel 4’s biggest broadcast since 1985.

The BAFTA-winning show was produced for the BBC before moving to Channel 4. And in case you’re not a fan, it stars no-nonsense master baker Paul Hollywood and fellow judge, food writer Prue Leith (who replaced British cookery royalty Mary Berry). Comedians Noel Fielding and new boy Matt Lucas provide the laughs.

Competing over ten weeks for the much coveted “UK’s Best Amateur Baker” crown are 12 non-professionals. Each week they attempt different baking styles and methods, creating  “Signature”, “Technical” and “Showstopper” bakes along the way. One contestant is named “Star Baker” by the judges, while another must leave the show, until one wins the final episode.

Smutty innuendo is a key reason why viewers love Bake Off. But among the “soggy bottoms” and bun and bap double entrendres, the GBBO offers many valuable lessons for business owners. Such as…

1 Good time management is essential

Not a single minute can be wasted when you have just a few hours to create a show-stopping Croquembouche or Flaouna to pass a tough technical test. The same is true in business. To maximise your productivity and profitability, you must make every second count.  

2 You must be able to handle pressure

Whether you’re in the Bake Off tent or running your own business, some pressure is inevitable, at least some of the time. If you can manage that pressure so it doesn’t turn into stress, you can overcome challenges and achieve great things. 

3 Proper planning pays off

Executing a well thought-out plan is essential to wowing the Bake Off judges. Contestants are often to be seen ticking off lists while working their way through highly challenging recipes. Similarly, sticking to a sound business plan strategy can ensure that you stay on track and achieve your ambitions.

4 Simplicity is usually best

Complexity often leads to disaster on the GBBO. Leave yourself far too much to do within your available time is setting yourself up for failure. And while pushing yourself is a good thing, setting impossible objectives isn’t. Better to keep things simple and do the basics well.

5 Success is built on consistency

Quality matters in baking and business, but you’re only as good as your last bake, task or job. Even star bakers and businesses can come unstuck if they fail to deliver quality time after time.

6 Everyone makes mistakes

Even those who have won the Bake Off have had mishaps along the way. Sometimes mistakes can be rectified, sometimes they can’t, but no one gets it right all the time. Making mistakes is acceptable – not learning from them isn’t.

7 You should listen to expert advice

There’s no doubting Paul Hollywood’s expertise. When things go wrong on Bake Off, he provides an immediate explanation, based on his deep knowledge and decades of experience. Bake Off shows that constructive criticism and advice from others can help us to improve.

8 Your personality should shine through

Your personality can help to set you part from other businesses, which is vital. Whether they’ve been tasked with making a macaron, bread roll or tea cake, successful Bake Off contestants put something of themselves into their creations. Being who you are can help to fuel your success. Viewers and customers like authenticity.

9 Appearance isn’t everything

On Bake Off we frequently see outwardly beautiful creations picked apart for lacking flavour or crunch. Sometimes they’re over or under baked. Similarly, an impressive business website can be undermined by poor customer service. Substance is more important.

10 Who dares (usually) wins

Sometimes you must be prepared to think outside the box and do things differently if you are to triumph. Whether that’s spicing up teacakes with masala chai or adding cream soda flavouring to your cheesecake topping, in business and the Bake Off – fortune favours the brave.

• You can watch the series so far on catch-up or by visiting the Channel 4 website. Blog written by Dead Good Content founder, Mark Williams.