When considering whether to invest in a company, bankers and venture capitalists look first at the entrepreneur, then at the plan. They invest in people, not plans. It’s not the content of the plan that matters, but rather what it says about the entrepreneur — how she thinks, how she collects confirming and disconfirming data, how she uses it to build a strategy for success, how she builds a team.
Business Plans Are Irrelevant, But You Still Need One
Often, the plan itself is irrelevant, not just to investors, but, more importantly, to the business. And most of the time it’s irrelevant once the business gets launched. But you still need one, although not necessarily a long and complicated one.
Do “just enough” business planning, as I described in an earlier blog, and not any more.
You Are Your Business Plan
Because what will make or break this business is not your business plan, but you, the entrepreneur — your experience and expertise, your relationships, and the work you’ve done developing your understanding of your target customers, your market and your competition.
As Dwight Eisenhower once said: “In preparing for battle I have always found that plans are useless, but planning is indispensable.”
Similarly, Abraham Lincoln said: “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”
Plan, then act. The plan is not the business, you are.
To read further into this topic, here’s a recent article in the Harvard Business Review entitled: “Entrepreneurs: You’re More Important Than Your Business Plan.”