As a Business Adviser, I often guide people through the process of developing a business plan.

You can imagine how I might react to the blog written by Doug Richard recently (I feel obliged to refer to him as “former Dragon, Doug Richard” as that’s how he’s often introduced in the media). Doug’s blog had the provocative title of, “You Do NOT Need a Business Plan to Start a Business”.

http://www.businesszone.co.uk/blogs/doug-richard/doug-richard-blogs/you-do-not-need-business-plan-start-business

I prepared myself to write a defence of business planning, but decided to actually read the article first.

It turns out that we don’t disagree generally, we simply don’t define the term “Business Plan” the same way.

Doug Richard points to five key things he feels should be considered when planning a business, but then says they should be used to define a “business model”, which you will then test and develop once you’ve started in business as you learn what works, what doesn’t work and what your customers tell you should be done differently.

I’m in complete agreement about that principle. Unless your business plan is being written to suit the specific interests of a potential funder, which can happen, the plan should be something you can use:

• To set yourself goals and target dates;
• To look back at and compare your achievements against your targets - to see what’s gone better or worse than expected.

The five points that Doug Richards says make up a sound foundation for your business model are:

• Identify your customers and their needs.
• Identify the products and/or services you will provide to meet these needs.
• Identify how people will learn about your products and services.
• Identify how and where they will pay you for your products and services.
• Identify who will help you to achieve these objectives.

These are some of the key issues we help people to think through every day here at The Business Factory.