Detailed guide to strategic preparation needed before writing a business plan. Entrepreneurs must know the risks and threats when starting a new business.
Anyone who has watched the television programme "Dragons' Den" will be aware how ill-prepared many entrepreneurs are when seeking investment. They often do not seem to understand their market or their business. The New Business Road Test guides would-be founders of start-up businesses through the key questions they need to understand if they are going to maximise their chances of success.
As the book’s subtitle suggests, The New Business Road Test guides those starting new business through the analysis needed to write meaningful business plan. It is divided into two parts.
The first part walks the reader though the business areas, personal skills and motivations that the business founders need to analyse. It shows through case studies why they are important and the sort of questions that need to be considered.
The New Business Road Test use a business strategy model based on seven domains:
This section is about creating understanding and as a result it is detailed and the writing dense. Many entrepreneurs just wanting to get on with their exciting new business may be tempted to skip this section. That would be a pity because there is much valuable experience distilled into these sections that bears careful reading and consideration.
An entrepreneur usually has to manage across many functional areas of the new business some of which are likely to be new or challenging to the business founders. This section should at least help the would be business creator understand where their experience or knowledge is incomplete. It will indicate where work is need by individuals and the management team.
Part 2 of The New Business Road Test holds the hand of the entrepreneur or executive as it leads them through the questions they need to answer in each of the seven domains. This is invaluable and diligently carried out will provide a solid basis for writing a meaningful business plan. It will creation of a business plan that can be used to run the fledgling business. It will also show that they have done their homework when they need to seek equity or borrowed capital.
Equally important the specific understanding of the business proposition and new business operating model builds on the broader understanding from Part 1. Together they will allow the new business owners and managers to foresee more of the challenges before they cause problems. For any new enterprise managing risks and mitigating any weaknesses in the management team are crucial to success.
As Felix Dennis said in How to Get Rich, becoming wealthy is more about execution than “the Big Idea”. With The New Business Road Test John Mullins provides support that makes effective execution and business much more likely. The main concern is that the advice in The New Business Road Test is excellent but the scale and thoroughness of the approach may put some readers off. However if an entrepreneur, however experienced they believe they are, really wants to be successful they should curb their impatience. They should really apply the ideas in this book; they will have a much better chance of success as a result.
John Mullins is a professor at London Business School and an experienced entrepreneurs who believes that the common reason for failure of business start-ups is that the “business idea does not stand up to the rigours of the real world” Hence they need to be Road Tested.
The New Business Road Test, What entrepreneurs and executives really need to do before writing a business plan, Third Edition (Third Edition:2010, ISBN:978-0-273-73279-2) By John Mullins is published in paperback by Financial Times Prentice Hall, an imprint of Pearson, at £24.99.