Can street smarts, charisma and passion stand in for a business plan? It all depends on who you ask.
I recently hosted two panel discussions that focused on women entrepreneurs in the food business. Participating were eight vibrant businesswomen in their 20’s and 30’s. Each had the entrepreneurial bug from an early age, each has boot strapped their business and most had no written business plan before they launched.
Of Passion and Practicality
Molly Fuller of Hands On Gourmet and Kathy Wiley of Poco Dolce are self-described pragmatists. “I wanted to make money,” said Molly. “My father always told me to do it myself, that was the way to make money.” Kathy Wiley said her decision “came down to the stable shelf life and high price point” of high-quality artisanal chocolate. Other participants cited their love of good food, and their lifelong desire to start a food business.
Fire, Ready, Aim
Kika Besher of Kika’s Treats and Christine Doerr of Neo Cocoa are graduates of La Cocina, a food business incubator in San Francisco where eligibility requires a business plan. Kika’s current business profile no longer resembles her first plan and she wishes she had a new one. “So many things change,” she said. Christine Doerr said her plan has changed and there’s a lot of “fire, ready, aim” in her business. Kathy Wiley (Poco Dolce) started a number of business plans, only one of which she came close to finishing. Malena Lopez-Magg of The Xocolate Bar said, “I did write a long business plan but it was obsolete as soon as it left the printer.”
– Understand the numbers, but don’t get hung-up on producing a document.
– If you make a plan, be aware that things change and the plan may need updating.
– Pay attention as you go and you’ll learn.
– If you are self-funded, the decision to create a business plan is in your hands.
A Different Take
I have no doubt that these amazing women will succeed. Street smarts and passion can take a business a long way. However, as a financial planner I see what bootstrapping can do to a business owner’s personal finances and I am duty bound to counsel caution. Here are my three reasons why you should consider developing a business plan.
Writing a business plan compels you write down the numbers and
decide which are most important to your particular business – then it’s
up to you to watch them like a hawk.
Taking shortcuts doesn’t work when it comes to growing a business.
Writing a plan helps you to think strategically and decide what’s best for the company in the long term. This can even include an exit strategy.
Assumptions change and circumstances change, but don’t make that an excuse to avoid having a plan. Even if you launched on sheer gut instinct, step back and create a plan now. You’ll be rewarded with clarity and peace of mind.
What do you think? Is a business plan an integral first step to launching a business? As always, your comments are welcome. If you have any topics you’d like to see here, feel free to let me know.
Women Entrepreneurs in the Food Business Panel
Molly Fuller, Hands On Gourmet http://handsongourmet.com
Nona Lim, Cook! S.F. http://cooksf.com
Gabrielle Fuersinger, Cake Coquette http://www.cakecoquette.com
Kika Besher, Kika’s Treats http://www.kikastreats.com
Women and Chocolate – A Natural Combination Panel
Malena Lopez-Maggi, The Xocolate Bar http://www.thexocolatebar.com
Kathy Wiley, Poco Dolce http://www.pocodolce.com
Christine Doerr, Neo Cocoa http://www.neococoa.com
Mindy Fong, Jade Chocolates http://www.jadechocolates.com
Dayna Macy, Author http://daynamacy.com