I post tons of articles that I find around the web and think can help my followers move your businesses forward. Oftentimes, people write asking me to elaborate on pieces of those articles so I started a series that does just that. I recently posted an article from Entrepreneur about common mistakes people make when launching a new company. The first of those mistakes that I want to tackle here is actually part of a much larger debate about the efficacy of business plans.
There is a long-standing debate in entrepreneurship circles about whether or not new entrepreneurs should spend time creating business plans. I’ve danced around this debate a number of times in other posts, but now I’m diving right in.
Lots of people out on the speakers circuit claim that a business plan is archaic. They argue that it is a waste of time because things are always changing in a startup and the business plan will be out of date before you’e actually had the chance to work through it. Frankly, that’s nonsense. These people use the idea that a business plan is a waste of time as glorified click bait to attract followers and buyers who want to be told that winging it is the way to go. But I have yet to hear anyone argue that it’s useless to try to plan for the development, launch, and growth of your business. So the real debate about whether or not to write a business plan is simply semantics and is a colossal waste of time. Those that argue against business plans simply use the term “business plan” to mean a formal, 50-page document with a table of contents and a pretty cover. A business plan – meaning a plan for your business – however, doesn’t need to be that and shouldn’t be pushed aside.
Let’s work through this a bit, shall we? Before putting your life savings into pursuing your business idea, do you think you should ask and answer a few of the following questions?:
- What exactly do I plan to offer?
- What problem does it solve?
- To whom do I intend to offer it?
- How can I make the people in my target customer group aware of what I have to offer and entice them to buy it?
- How will I produce what I want to offer?
- How much will it cost me to offer it and is that more or less than what people are willing to pay for it?
- Where will I get the money to build my company and how long will it take me to start generating revenue?
I could go on and on but you get the point. Of course, you need to answer these questions before you go full throttle into a new endeavor, unless your success plan is to rely on dumb luck, that is. If you answer these questions in any type of detailed way, you will be creating a business plan. Whether you choose to write that out in a formal manner, put a cover page and table of contents on it, and present it to an outside investor or not, it’s still a plan for what you want to do with your business. Stop spouting off about how you’re too enlightened to work on a business plan and start working on your business. Spend the time to think through how you will build it, who you will build it with, and how you will let everyone know about what you’re doing.
That’s the end of my rant, but I’d love to hear your thoughts so let me know in the comments below if you believe in business planning or not.
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