Once again this year I heard a lot of chatter about business plans. Many who teach entrepreneurs now question the utility of teaching our student using business plans.
My take? I think one of the biggest problems is not business plans themselves, but how people use them, when they write them, and most importantly how they develop them.
We set business plans up on a pedestal as if it is the holy grail of entrepreneurship. It is as if we are telling aspiring entrepreneurs that once they unlock the secrets of the business plan, the world of entrepreneurial wealth will come pouring out at them.
Are business plans all you need to know to unlock the door to success? Of course not.
Is writing a business plan a complete waste of time? Also, not true.
So why do we teach about business plans? It is because they are a way to help organize what can be a complex and overwhelming array of issues. It is because it forces us to integrate our marketing plans, or operating plans and our financial plans into one, coherent story. It is because we need to put it all down on paper to make sure that we have thought of all of the important stuff that goes into a successful start-up. It is because business plans have become the standard for communicating about a business to those with money.
Will a formal business plan make you richer and more successful?
Probably not. I know many entrepreneurs who never wrote a formal
business plan for their ventures who have made a lot of money.
But they all understood the importance of business planning. They just never took the final step of writing it down. While the business plan itself may not always be necessary, effective business planning always is.
Understand that the business plan is just a map. It is a map into an unknown territory. Our actual path in our business will likely look very different than our plan. But the plan got us thinking. It made us think about all the details. It helped us understand how all of the parts of a business fit together to make a whole venture. It helps prepare us for our journey and makes us better prepared to adjust to all of the surprises that we will face almost every day we're in business.
Success will not be determined by the plan. Success comes from implementation and execution.
