Forbes posted a good article today about “Why Business Plans Are A Waste Of Time” and I couldn’t agree more.
My personal experience wasting time on a business plan.
Before I built QuoteCatcher (the company I sold), I spent nearly 2 weeks crafting a very detailed business plan. It covered all the bases: financial projections, marketing analysis, competitive research, management summary, etc. It was a work of art…
And it was almost a complete waste of my valuable time.
My business partner discouraged me from writing it, but I was convinced it needed to be done. I wanted to have everything planned out so we knew exactly what to do when we officially launched. That’s my nature…to plan and organize.
But guess what happened. By the end of the first month after our official launch, everything had changed. Our market had changed. The marketing strategies I outlined didn’t work. My financial projections were laughable.
Everything changes too rapidly.
I’d spent 2 weeks trying to predict the future and my crystal ball was broken!
In Eric Reis’ book, “The Lean Startup” he talks about how rapidly the world changes now. Between an idea’s conception and its launch, the entire business landscape can completely change.
New businesses and new ways of doing things are being developed and released everyday. If you spend 2 weeks writing a business plan, it may be outdated before its finished!
The Executive Summary Business Plan
That’s why I (now) tell my clients to create a 1 or 2 page executive summary business plan. This can be written in a few hours…a day at the most. It helps you think through what you want to do in enough detail to help you do it.
To quote Napoleon Hill, “Reduce your plan to writing. The moment you complete this, you will have definitely given concrete form to the intangible desire.”
He doesn’t say the plan needs to be a book or take a month to create. Write enough to help bring some focus and clarity to your vision, and nothing more.
The only caveat?
If you’re seeking funding from investors, you’ll need a full-blown business plan. There’s no way around it. They want to know you’ve thought through every possible scenario before they’ll write you a check.
And the best way to get funding is to launch the business and prove the model with real cash flow. The added benefit is that your business plan will then be based on real data instead of your crystal ball.
I’ve created a sample business plan you can use to help you organize your thoughts. You can download it by signing up for my Biz Startup Info Newsletter.