How important is business planning?

Grant Leboff: One of the things you talk about in the book, which is kind of essential, is business planning and I think sometimes, entrepreneurs find that bit a bit dull really. So from your point, how important is it to have a really good business plan?

Guy Rigby: Well, there are differing views on this. I'm afraid I belong to the old fashioned camp, that it's good to have a plan. It doesn't need to be 100 pages long, in every bit of detail but what it needs to do is to steer the business. So effectively, you keep your eye on the ball. You know what you're trying to do in terms of product, you know what you're trying to do in terms of audience, you know what you're trying to do in terms of management, you know what are you trying to do in terms of finance, and all this is kind of, preordained in your business plan. That's not to say the business plan will come true but at least at the time you wrote it you believed it. And hopefully the business plan will go in the drawer and five years later you look at it and you'll think, wasn't I clever that happened. But actually the most likely thing is that it will come out quite frequently, especially in the early days, and you'll be changing things and you'll be working on different aspects as you go along.

Grant Leboff: So I suppose, I have obviously spoken to entrepreneurs before where, they can't see the value in the plan because, as you've alluded to, it's going to change, I'm not going to get it all right, a lot of these numbers are guesswork etc., etc. So being in 'the old school' as you put it, in the old camp of ‘it's important’, why is it so important if most people acknowledge that well, the plan you like today won't look like that two years from now?

Guy Rigby: I think it's a bit like setting off to go from your home in Marlow to Borehamwood or wherever I am right now. You know if I hadn't got a satnav, which is effectively my business plan, if you like, in terms of getting me here, I probably wouldn't have got here on time. I think that it just creates structure around the business and without structure, you're going to get yourself in some bother. So I think that what you do is you create a business plan. First of all it's quite important, if you've got investors, that they understand where the business is going, so it's a communication document. It's also a document for your staff - it should be - even if it's a condensed version of it. It should say this is why we're here, this is what we're doing, this is this is how we're going to get there. And then at the end of the day that is there to be disproved or changed as time goes on, but at least you start with some clarity.

Grant Leboff: I understand. And in terms of... you said it doesn't have to be 100 pages long, so what are the key ingredients? What are the key things that should be in a good business plan that business leaders should have really thought about?

Guy Rigby: Vision, Strategy, Tactics, Management and Money. They are absolutely the key things and obviously, sales - at the end of the day - because, without demand creation, you don't have a business at the end of the day. Some businesses, especially more modern ones, will start a business and try and grab an audience and then figure out what the business model is. Sometimes it succeeds, sometimes they don't. In most traditional businesses, you actually have to have that demand generation peace included.

There may be small changes to the spoken word in this transcript in order make it more readable.