BUSINESS PLANS: For Entrepreneurs Only?

The familiar context when talking about business plans is as a tool for entrepreneurs. Quite often, start-ups are launched within established companies as a new project, division, subsidiary, etc. This was the case with our client, Philly & Mools when we started working with them in 2008.

Do these ventures require business plans? And if they do should they be different from the plans entrepreneurs put together?

The answer to the first question is an emphatic YES; the answer to the second, an emphatic NO.

All new ventures, whether funded by venture capitalists or as in the case with intrapreneurial businesses, by shareholders needs to pass the same acid tests. After all, the marketplace does not differentiate between products and services based on who is pouring money into them behind the scenes. The fact is intrapreneurial ventures need as much analysis as the entrepreneurial ones do, yet they rarely receive it.

Within companies, new businesses get proposed in form of capital-budgeting requests. These faceless documents are subject to detailed financial scrutiny and a consensus-building process as the project moves its way through the chain of command. Almost all these proposals and budgets that is being submitted always promise returns in excess of corporate hurdle rates. It is only after the new business has been launched that these numbers explode at the organization’s front door.

That problem could be avoided in large part if intrapreneurial ventures followed business-planning guidelines. For instance, business plans for such ventures should include resumes of all the people involved. What has the team done in the past that would suggest it would be successful in the future? In addition, the new venture’s product or service should be fully analyzed in terms of opportunity and context. Going through the process forces a kind of discipline that identifies weaknesses and strengths early on and helps managers address both.

It will also help enormously if such discipline continues after the intrapreneurial business kicks off. Manager should track performance as a matter of course by asking questions such as

  • How is the new venture doing relative to projections?
  • What decisions have the team made in response to new information?
  • Have changes in the context made additional funding necessary?

Such questions not only keeps a new venture running smoothly but also helps an organization learn from its mistakes and triumphs.

This was what we did with Philly & Mools when they started Metro Taxi. Perhaps managers can learn useful lessons from entrepreneurial businesses, one lesson being: Write a great business plan, even if its for a project.

If you are a manager or an entrepreneur and you will like to prepare a business plan, kindly see the business plan options we offer.

To your success!

Olanrewaju Oniyitan