Are business plans necessary or not? This
seems to be a serious debate as of recently. However, in order to intelligently
answer this question for yourself, it would be wise to find out what various
experts have to say on the subject first. Following this advice, here is an
examination of two expert views on the value of business plans, from Tim Berry
and Rhonda Abrams.
Tim Berry has been a
business plan expert since 1974, and since then he has authored or co-authored
several books on business planning. Additionally, at Entrepreneur.com he serves
as their business planning coach. He graduated magna cum laude from the University of Notre Dame with his BA in
Literature, received an MA with honors from the University of Oregon in
Journalism, and obtained an MBA from Stanford as well. Berry is the founder and
president of Palo Alto Software, Inc. He has also been to 13 countries presenting business-planning seminars, and has taught entrepreneurship and business planning at University of Oregon
for the past 11 years. Berry adds to his qualifications as an expert on
business plans, since he reads and reviews approximately 50 business plans per
year for the Willamette Angel Conference (WAC) as an investor member.
Rhonda Abrams is a foremost authority and best-selling author on entrepreneurship and small
business. She is a USA Today syndicated columnist and has written numerous
articles for Inc.com. She graduated from UCLA and attended Harvard University
for her master’s degree. In 2011, Abrams received the Top Small Business
Influencer award, and she has spoken at many conferences, workshops, and
meetings. Rhonda Abrams has provided advice to thousands of people seeking
expertise on business planning for over 15 years. She is also the president of
The Planning Shop,
a company that assists entrepreneurs with starting, running, and growing their
own businesses.
What are some of the critical and key
components that these two experts say investors are looking for in a business
plan? Tim Berry mentions in his article that elements such as updated project sales, cash flow, costs, expenses, and
key performance measurements should be included and stated very concretely. He
also suggests that you should state numerical, objective performance goals in
order to be able to track results. In a NAFE Magazine article, Rhonda Abrams
succinctly states the following: an effective business plan should contain a
narrowed presentation of your competitors, what their pricing structure is, what
makes your company unique compared to many other similar companies, along with
the exact start-up and operating costs for your business. Each expert has
suggested varying key elements that are essential for capturing the eye of
potential investors and making your plan stand out, but one thing they both
agree on is that your information needs to be specific and concrete. In my
opinion, these experts have provided very sound business planning advice indeed!
