Anyone who has ever mentioned starting their own company has been told that they need to start with a solid business plan. These plans, we are taught by business sages who spend more time in the classroom than in the boardroom, are essential. They help investors see why your idea is sound, how it will make money, and why people will buy what you are selling.
Are business plans truly as essential and powerful as our well-intentioned mentors would have us believe? The answer may surprise you.
Consider this: Every minute you spend working on your business plan is a minute of actual work that is lost. Instead of formatting the cost-benefits-analysis graph on page 12, you could be working the phone lines and building relationships. While you were at Office Depot waiting to get full color copies of your business plan printed off, your competitor was finalizing distribution agreements with suppliers.
Business plans ask you to write out exactly how your idea is going to work and how your business is going to operate. It is natural to write the plan from the best-case-scenario perspective so that readers will believe in your ideas. But what are the chances that your launch will be anything close to a best case? There are a million things that can go wrong during any business or product launch. No matter how hard you try, it will be impossible to plan for everything that can (and will) happen.
Entrepreneurship is a game of passion. It takes tremendous effort and willpower to take a dream and turn it into a successful company. Anything that stands between your dream and taking action to make it a reality is something that you must be wary of, no matter how reasonable it may sound.
So should you just ignore the business plan altogether? There is no one right answer to that question. A business plan is not a bad idea in and of itself. The problem is when the plan begins to occupy more time than your actual work. A plan can be a simple sketch that shows how you are going to go from concept to launch. Or it can be a labyrinthine document that tries to accommodate every eventuality and in the end does more to warn off investors than to draw them into your vision.
Instead of writing out a dry document full of numbers and accounting jargon, make your business plan just another version of your elevator speech. In the end, it will be your passion and your personality that will both determine the success of the product and the likelihood of attracting investors. The market has to believe in you as much as it does your product, and a good business plan will be powerful enough and short enough to hook them into your vision without boring them with business school clichés.
It is action that makes a successful entrepreneur, not a business plan. Action breeds success, and a business plan can be a cruel temptress that keeps you in your seat instead of working the crowd. Don’t let 20th century business axioms bog down your 21st century innovations.