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Q: I work as a programmer and co-promoter for a business in which my partners and I recently invested a little less than half a million dollars. The two promoters with whom I work, while very talented, don’t have a lot of business experience; they’re more creative types. I, on the other hand, have both practical and creative impulses.
The problem is that my partners don’t believe in business plans. Whenever I argue that it’s crucial to have a plan in order to have any chance of success, they reply that planning is only guesswork anyway. I’m so frustrated that I’m not sure I can keep working with these guys.
Could you provide me with some good reasons to present for having a business plan? If I had a great argument, I could persuade my partners, and maybe our business could eventually make a real difference in people’s lives.
— Aidan
A: Here’s a short answer to your question: Business plans can be very useful. But they shouldn’t slow you down.
I didn’t even think about creating a formal plan for my first business. I just dived right in. Honestly, the whole plan thing just seemed boring. A lot of entrepreneurs aren’t fans, so your partners aren’t alone.
However, I’ve since learned that business plans are invaluable. They’re a must if you’re looking for investors, or a loan, and they’re a great way to map out your business’s first few steps. If you want to prove that your idea is worth investing time, money and effort in, you need a business plan.
Take a look at Virgin StartUp’s business plan template (available here: bit.ly/2gjhlCy). We looked at why people avoid them (they can be dull and intimidating) and tried to create something more practical. All you have to do is proceed through the template and answer some questions, and at the end you’ll have a business plan.
The most important part of your plan is the executive summary. That’s your elevator pitch, the place where you succinctly describe what your product or service is, and who’s going to buy it. Remember, if your pitch can’t fit on the back of an envelope, it’s too long. Simplify, simplify, simplify. It’s a rule we follow at Virgin; the business plans for many of our most successful companies were written on the backs of envelopes, or beer coasters.
My dyslexia plays a big role in how I approach business plans. I want them, and all our communications at Virgin, to be straightforward and concise. You need to be able to explain what your business is all about in a couple of sentences.
If you can’t, maybe you don’t really know what the heart of your business is. The heart of Virgin’s is changing business for the better, whether it’s an airline or a media company. We want to disrupt, and innovate, to improve things for the customer, while making some money along the way.
Once you know what your business is and can easily explain it to others, you’ll be able to make challenging decisions more confidently.
A good business plan should chart a clear path forward while allowing you to make course corrections when needed.
While you and your partners may clash on this particular issue, you do seem to have a good mix of different perspectives, which is precisely what I look for in a leadership team. Don’t be afraid of your differences — instead, play to your strengths. Having different leadership styles and personalities can be hugely beneficial to your business, helping you solve old problems in new ways.
Take Frank Reed and Matthew Bucknall, co-founders of Virgin Active. They had very different personalities and business approaches, but their skills complemented each other. Frank was the creative thinker, whereas Matthew had the steady business head. Matthew focused on the data, and figuring out where the company’s health clubs should be located, while Frank obsessed over the branding and design.
Virgin Active was built on the principle of trust; I simply let Matthew and Frank do their thing. Mistakes were made along the way, but the pair learned from them.
Aidan, don’t be afraid to give your team the freedom to discover what they’re good at and what they’re not (even if that includes business plans). Look for where you and your colleagues’ skills balance each other out and focus on the positives in your relationships. All partnerships take a bit of compromise to work, especially in business.
Of course, having a business plan doesn’t mean you can stop researching the competition. You need to make sure you know your market well, and are always on top of developments, so that you can protect your company.
Matthew and Frank travelled the world for a year, visiting the best health clubs and trying to figure out what we could do better than everyone else. It helped Virgin Active fend off the competition and disrupt the fitness industry.
They discovered that people didn’t want to pay huge joining fees or get locked into endless contracts. That they wanted the swimming pool to be a certain temperature, and powerful showers, and spacious changing rooms. Matthew and Frank came up with a formula for success by focusing on the details, and giving people what they want, in turn creating a billion-pound business.
So yes, your team needs a solid business plan. But don’t underestimate the value of different perspectives and a willingness to jump into the deep end. You can’t enter the game without the former, but you can’t win without the latter.
(Questions from readers will be answered in future columns. Please send them to Richard.Branson@nytimes.com. Please include your name, country, email address and the name of the website or publication where you read the column.)
© 2017 Richard Branson (Distributed by The New York Times Syndicate)
