The Value of a Business Plan

In the Art of War, Sun-tzu (6th BC) wrote that, “One who, fully prepared, awaits the unprepared will be victorious” (p. 179). Sun-tzu theorized on military applications of his concepts, however, his ideas remain powerful tools of business today. As a former business owner, I can attest to the need to precisely plan any business prior to engaging in it. In my case, the business plan was a reactionary process that I undertook at the request and insistence of lenders. Today, with lending standards being challenged resultant of years of abuse and poor practices, it is increasingly important for entrepreneurs to put together a complete business plan early in order to acquire financing. Starting to write a business plan while attempting to conduct business and solicit money from lenders is not a viable option.

Statistically, most businesses fail within their first two-years. According to Sharif Khan (2005), “78% of businesses fail due to lack of a well-developed business plan.” Today, many entrepreneurs are setting forth on a business venture without any plan whatsoever. This is a sure way for business failure. It is the equivalent to driving with a blindfold on. My advice to aspiring entrepreneurs is to conduct as much research and planning as early in the project as possible.

There are many organizations that can aide prospective business owners in the challenging process of organizing a business venture. According to its website, SCORE “is a nonprofit association dedicated to educating entrepreneurs and the formation, growth, and success of small business nationwide.” When I was self-employed, I turned to SCORE for counseling and advice. The only investment required to speak with a SCORE member is your time. As a partner of the Small Business Administration, I would highly recommend that any aspiring entrepreneur utilize this valuable community resource.


References

Khan, S. (2005, March 24). The Chief Cause of Business Failure and Success. Retrieved
on February 12, 2009 from http://www.enterprisetoronto.com/index.cfm?linktype=mainlink&linkId=99&cont
ent_id=805&fromurl=center
SCORE (2009). About SCORE. Retrieved on February 12, 2009 from
http://www.score.org/explore_score.html
Tzu. S (6th BC). In D. Sawyer (Ed.), Sun-tzu: The Art of War (1994). New York: Fall River Press.