One of the hallmarks of good business planning is being open to disconfirming information. Now let’s apply that principle to the decision on whether to do business planning itself. We think it’s a good idea, but maybe we’re wrong. Maybe it’s OK to do what most business owners do all the time: just wing it, and then make adjustments as you go.
So what are the arguments against business plans?
First, let’s be honest, they’re works of fiction, predicting a future that refuses to cooperate. Admit that you have very little idea what your business will look like in a few years. Move on to the next thing on your to-do list.
Secondly, a comprehensive plan won’t help you raise money. Investors won’t read it. A few pages, sure, if you’re lucky. If you have any chance of getting startup funding – and very, very few businesses do – then it’s the strength of your idea, relationships, and track record that will wow them. Not 37 pages of dense text and hockey stick projections.
Finally, stuff happens, and success will depend on how you respond, not what you’ve written down. Business plans don’t succeed; people do.
So should you go through a business planning process? I think the answer is still yes. It forces your management team to get clarity and agreement on purpose, approach, priorities, and information gaps. That’s useful even if most of its assumptions prove to be incorrect. Even if it doesn’t help you raise any money. In contrast, the wing it model is a bit like heading on a trip without a destination, let alone directions. A good business plan provides you with a decent map with a big X on it. That will help focus your efforts on what you need to do to get there. And how you will adapt when you hit those inevitable obstacles. Do “just enough” planning to serve your purpose, but don’t skip it entirely.
Find your X on the map and head there.
For more resources, see our Library topic Business Planning.