Write a Business Plan - Even Large Companies Get Burned by Failing to do Their Homework

It doesn't take much brain power for me to come up with things that drive me nuts about corporate America. It seems like every day I get new material without even trying. I figure pretty soon I'll be able to write a book. "Why Corporate America Sucks" would be the title. I'm sure everyone would rush to the store to get a copy...either that or the complete opposite.

My latest encounter of the shear stupidity that takes place in corporate America happened Wednesday. Now, I need to back up for a second to properly set the story up. I am an engineer for a large consumer goods company, the second largest in it's industry, but it's a distant second. We have roughly 20% of the market whereas our largest competitor has around 70%. We are also less than 1/4 of the size of them. This being the case, there are many ways that we could go about bridging the gap. The one which our management seems to have chosen (for better or for worse) is innovation - beating the competition to the market with superior products.

Starting with all of the disadvantages I just described, we need to avoid stupid mistakes that waste time and money. Instead, it seems like we continuously make those mistakes that keep us sitting in second place.

So I am sitting in a meeting on Wednesday, for one of these "innovative" products that I am working on developing, and someone says that there may be a problem. Seems as if a third company has already patented the project that we have been working on the past few months. Add in the concept/market research phase that I wasn't involved in, and the project has probably been going on for at least six months and cost the company millions of dollars. Oops. All because whomever was writing the business plan for this project neglected to evaluate the current market. They likely assumed that since our number one competitor wasn't doing it, that no one was doing it. Well, now the company has lost time and money that it can't afford to lose. Mistakes like this are absolutely killer because they could have been avoided by doing a five minute online patent search.

Companies will always make mistakes like this. As entrepreneurs, you just have to make sure that your business isn't the one making them. Writing a thorough business plan will help reduce the likelihood of making a mistake like that. A good business plan encompasses all the important areas of your business, including sizing up the current competition. You will likely be starting with all of the cards stacked against you. Writing a business plan should not be an option. Failing to do so could result in blunders like this one and put you out of business.