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Episode Info: Hey there, thanks for joining me again this week.So business planning is the focus this week. Now, what do people usually say is the first thing you need before going into business?  They say a business plan, right? Doesn’t matter if it’s your mom, your brother, a banker or someone you meet in the coffee shop. They all drink the same Kool-Aid and start chanting, you need a business plan, you need a business plan.Like lemmings. Like all the people today who chant, you need to define your ideal customer, you need to define your ideal customer. Basically people hear something, think it’s authoritative and just repeat it.On the surface, it makes sense that we’re told to create a business plan. Because real businesses have business plans, and we want to run a real business, right? But, have you ever seen a comprehensive business plan? Have you written a business plan? And, be honest…do you have a written business plan for your farm?I’m not saying that planning isn’t necessary, even helpful. But “traditional” business planning is overemphasized, in my view. Just as a college education (usually) is.And, listen, I’ve written and reviewed a ton of business plans. Many of them well over 100 pages long, full of internal and external analysis, capital allocation plans, key performance goals, market analysis, financial projections, contingency plans, human resources and marketing plans, SWOT analysis, Gantt charts and so on. And you also see a lot of emphasis on exit strategies, which not many new farmers are interested in. Which is too bad. Not because they should necessarily aspire to sell their farm businesses. But because they should build and run them as if they would. That way, they’d be much more successful.But back to the point about business plans. Why did I create these plans, and were they useful?Well, most of them I created because I had to. I worked in a Fortune 500 company and we had to create plans to persuade a board of directors, lenders and investors, to make capital allocations.Later when I founded my own business, I had to create the plans to facilitate funding from venture capitalists, angel investors and banks.But the key phrase here is “I had to”. So, I did. But what happened to the plans after I created them?They got filed away, in the old days. Later as technology took over, they got stuck in a digital folder. But in both cases, they collected physical and digital dust.In the corporate world, the business plans were useful for upper management to admonish me if I missed projections. They could say, “here’s what you said you’d do” and point to any gaps that existed. Fortunately, that was rarely the case for me, but that was how the plan was used. When dealing with lenders, especially banks, with my own business, the business plan supposedly established that I was serious about my business—because I had obviously put a great deal of thought into my strategy. Of course, my financial projections al...
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