Entrepreneurship – make a plan
January 23, 2009
“Let our advance worrying become advance thinking and planning.” – Sir Winston Churchill
For those of you who do not know me, I have started, managed and sold two start up businesses. My first was a restaurant which grew to about $4 million in revenue, was profitable and employed about forty people. My second business was a computer services firm which grew to $1.5 million in revenue and ten employees.
I sold my restaurant when I was 24 years old and felt like I had the “midas touch”. It was successful out of the gates, was very popular in our community and grew beyond my expectations. That first success had me convinced that I could do it again without much effort. Boy was I wrong. I made a ton of mistakes in my second business and paid for them.
While I could probably fill many blog posts just listing my mistakes, I think my fundamental error was not developing a well thought out plan. I am convinced that, had I put some thoughts on paper before starting my second business, it’s doubtful that I would have ever founded it. This is not because it was a bad business, but more because it was the wrong business for me and what I wanted to accomplish.
More on my second business in another post.
I often tell budding entrepreneurs that, knowing what I know today, I wouldn’t have invested in myself when I started the second business. Instead of researching a market, identifying a problem, designing a solution, understanding how I was going to make money and assembling the right team I just “went for it”. I’m convinced I did this because I had already been successful once, why not a second time?
Since selling the last business I have come full circle and am now a fervent believer in planning. A business plan doesn’t need to be complex, it just needs to answer a few fundamental questions:
(1) What is the problem?
(2) What is your solution?
(3) How are you going to make money?
(4) Who are you?
I decided to post on this topic because of a recent email exchange with my sister-in-law. For sometime now she has been convinced that an opportunity exists for her to develop a patient advocacy consulting practice. I won’t butcher her business concept here, but suffice it so say that I agree with her (and have recent experience to bolster my point of view) and think she should do it. But, I don’t think she should do it without a plan.
In our most recent exchange she wrote that she was, “at an absolute standstill.” She thought it was because she didn’t know how to market the concept (although there are two physicians who have already agreed she has an interesting business in mind and one specialist has gone so far to offer to help market her business through his web presence). But, in my view, she’s at a standstill because she hasn’t answered the four questions appended above.
She’s going to write the plan and I have offered to act as her sounding board. The hardest part of planning is getting the first words on the paper, so much like she plans to be a patient advocate, I will be her “planning advocate.” I will post on her progress here and hope to be able to announce the launch of her business in the not-too-distant future!