The Real Value of a Business Plan

NB: Here’s the inaugural post in a new category for Inspired Solo – “Mechanics of Going Solo” in which posts will examine the ins and outs of actually “going solo” the Inspired Solo way.

Meg Tebo, writing for the ABA Journal’s May edition, discusses “The Write Way To Start A Firm” in which she examines the traditional business plan. Diana Laskaris, a consultant and solo in Chicago, offers two reasons to create the plan in writing – to provide a map for the solo, and to “prove the firm’s viability to lenders, landlords or other potential creditors.” Elsewhere in the article, Joe Kopietz, a small firm owner in Michigan, encourages the purchase and use of business planning software.

I disagree.

First of all – a business plan is a document. Nothing more, nothing less. It requires nothing more sophisticated than a working knowledge of a good word processing program. Word or Word Perfect will do just fine. There is truly no need to incur additional expense by purchasing specific software for this purpose, especially not for the budding solo.

Secondly, a business plan may serve those purposes Ms. Laskaris mentions, but that’s not the chief value of the plan. The business plan’s value lies in its evolution and in the process the solo undertakes to get to the “finished” document – “finished” because it’s never truly finished. It is a living breathing thing, that will change. It has to change, because you cannot possibly foresee every possible development or event over the next six months, year, or five years.

I recommend a different approach. Look on your business plan as a journal of sorts – a journal that’s certainly more formal than most journals, but essentially a documentation of your current thinking. Certainly, write down your goals, and outline your plan to get those goals accomplished. But then schedule time on a regular basis (I suggest monthly, but it can be done quarterly) to review that plan and update it to fit the current reality. Measure your progress, as well as the efficacy of those plans. What worked? What didn’t, and why? What can you do to tweak that result or this process or that procedure?

I suggest keeping three business plans, the first two being subsets of a larger document, the third, which is a master document tracking the evolution of your firm (much like a business diary). The first is for internal use only, and it’s the current iteration of the plan. The second would be the trimmed-down version of the first that you’re willing to show to outsiders (those “lenders, landlords and potential creditors”), and it will focus more on firm finances.

It’s not as much work as it sounds like, trust me.

Regardless of whether you agree with the traditional viewpoint, reflected by the commenters in Ms. Tebo’s article, or with my approach (or some third way, completely unique to you), I do agree with Ms. Laksaris and Mr. Kopietz that planning is crucial, and you have to engage in some process designed to focus your thinking about your practice’s future development. A business plan is a great way to do that focused thinking, regardless of how you approach it.

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1 comment so far

  1. Practical Lawyer on

    I agree completely. I don’t think a formal business plan is the best device for mapping out a solo lifestyle. We’re attracted to the solo setting because of its flexibility – a rigid plan defeats that. A journal is a wonderful idea. I’m also using both a flow chart program and an outlining program on my laptop to accomplish a similar, free-flowing, business plan.

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