Posts Tagged ‘best practices’
Challenging Assumptions…
Business plans often include a section on Assumptions. This section is frequently the most important section of all.
Why? Because when assumptions are in doubt then the plan is in doubt. When seeking support or funding, it won’t be the vision or the plan or your enthusiasm or your credibility that will doom your effort, it will be your un-believable assumptions.
Let me explain.
Assumptions in a business plan are all those things you take for granted. What made 2008 so important is that so many of the assumptions concerning the US economy were proved to be wrong. People assumed the price of housing would always go up. (Oops, assumption did not prove to be true.) People assumed they would get raises so they could pay off increasing mortgage payments. (Oops, that assumption did not prove to be true.) People assumed that financial advisers would send out statements that were true. (Oops, that assumption did not prove to be true… even though it was the law of the land.)
What assumptions are you making as you put your business together? Are you assuming that people will always need what you have to sell? Are you assuming that you will always be there to make sure your business runs? Are you assuming that interest rates will stay low so it will be easier to repay debts?
Look at your notebook. Take a step back. Think about the unspoken and unwritten assumptions that are being made. Write them down. What if you’re wrong? Then what?
That becomes your Risk and Contingencies section. That’s what.
If you can’t be honest about what might go wrong, how can it be assumed that you can make it all go right?
