How Did All This Business Plan Stuff Get Started?
Business plans are designed to help entrepreneurs and investors look into the future and see the success and growth of a business. But, sometimes a quick look backward can help you to move forward, to learn from the successes and mistakes you may have made.
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Although each business plan is a unique document designed specifically for a company or startup, the history of business plans has changed very little throughout time.
Going from parchment paper to online presentations, the end result, having a written plan that demonstrates to the business owner and possible investors how they will make a profit, hasn’t changed. Here’s a quick study of the history of the Business Plan.
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The 18th century
The first business plans were probably pressed into clay tablets by the Sumerians in ancient times when they were writing about trading and livestock, but the invention and author of the modern business plan are often credited to Pierre Samuel, Sieur du Pont de Nemours.
Before Samuel and his son Éleuthère Irénée left their native France in 1799 to build a gunpowder mill in Delaware, they wrote numerous letters to potential investors that offered a plan on how the mill would make a profit. Clearly, this was a business plan that worked. Samuel and his son secured their investors, and today their business is known as the DuPont Company.
The 19th century
During the 1800s, business plan competitions began. You might call it an early version of crowdsourcing. Industry leaders offered cash prizes to encourage the best and brightest to submit their ideas for improving production or fixing problems.
In 1874, the National Butter and Egg Convention awarded $1,000 to the best essay that showed how to produce the largest quality of best quality butter, for the cheapest price and how to sell it at the highest price.
The Convention was looking for a business plan; and they referred to it in a lengthy statement: “… the best incentive to the adoption of any business plan is to show that it pays. Let it be provided and illustrated in practice that improvements in butter making secure larger profits, and they will be adopted …”
In modern times, universities, communities, corporations, and others sponsor business plan competitions, as a way to encourage entrepreneurship and industry best practices.
The 20th century
By now, it was common wisdom that a business plan was crucial to the success of a new business.
For instance, a 1921 major publication noted the importance of a business plan, especially if you wanted the business to succeed, “It is necessary not only to have big men in the operation of big business, but it is above all necessary to have a good business plan. Individuals come and go, they work and they pass, but the work must go on.”
Over 50 years later, in 1976, another important financial publication offered advice to the aspiring entrepreneur, “An early step in starting a business is to draft a blueprint that shows how your business will be organized, where it is headed, and what you’ll need to get there.
Bankers, suppliers, and others you’ll rely on for help will want to see your plan. It needn’t be a formal document, but it should contain information that demonstrates you know what you’re doing.”
Business plans are still just as vital as ever, although how you write them and what they’ve written may be different than in the past.
Now, you can take workshops, seminars, and college classes on the subject. Or, you can choose to use your time wisely and have a professional team like Wise Business Plans put their years of expertise to work for you. Developing one of a kind business plan that will stand the test of time has been Wise Business Plans’ focus from the start.
The centuries and decades may change, but the facts are still the same, business plans not only benefit the investor but the business owner. Business plans force business owners to think critically about their business.
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FAQs:
Having a business plan is crucial as it serves as a roadmap for your business. It helps you outline your goals, strategies, and financial projections, providing a clear direction and increasing your chances of success. A well-crafted business plan also helps attract investors or secure financing.
A business plan typically includes sections such as an executive summary, company description, market analysis, organization and management structure, product or service offerings, marketing and sales strategies, financial projections, and funding requirements. These components provide a comprehensive overview of your business and its operations.
Market research involves gathering and analyzing data to understand your target market, industry trends, competition, and customer preferences. It can be done through surveys, interviews, online research, industry reports, and analyzing demographic or market data. Market research helps you make informed decisions and validate the viability of your business idea.
Financial forecasting involves estimating and projecting future financial performance based on current and expected business conditions. It includes elements such as sales forecasts, expense projections, cash flow statements, and profit and loss statements. Financial forecasting helps you assess the financial feasibility of your business and demonstrate its potential profitability to investors or lenders.
A business plan is not a static document; it should be reviewed and updated regularly to reflect changes in the market, industry, or internal factors of your business. It is recommended to review and update your business plan at least annually, or whenever there are significant changes in your business model, target market, competition, or financial projections. Regularly updating your plan ensures its relevance and alignment with your evolving business goals.
