The gist of the article is that as an entrepreneur “you’re wasting your time writing a business plan”
I call this irresponsible journalism for the following reasons: Not every entrepreneur went to Harvard, Stanford, or the Wharton School of Business. Not every entrepreneur is starting up a business that is looking for Venture Capital Funding.
This article fails to capture the fact that the backbone of Small Business in America is still run by the simple non-business administration trained people who have a good business idea and are willing to sacrifice their life savings to bake this idea into a profitable business. These are the people who need a business plan to prevent them from losing their or their relatives’ hard earned investment.
I always tell my clients that the reason for a business plan is not to go looking for financing. You develop the business plan for you. So that you can peel back the onion and really convince yourself that you understand every aspect of what you are setting out to do.
Also, the local Community Banks or Credit Unions where these entrepreneurs typically get their financing want to see a business plan to be convinced that they can really execute this business idea and make it happen. These businesses are the ones producing revenue on the order of several $ hundred thousand. This is what Small Business America is all about. Not the “LowerMyBill.com” that sells for $300 million.
I also chatted with a colleague of mine, Alan Zell, the Ambassador of Selling, and though he hadn’t read the article he had the following comments.
“It is my way of thinking that the first purpose of a business plan is not for an input of money from outside sources banks, investors, family, friends, others. The prime purpose is to take thoughts, which are intangible, and put them into a tangible form i.e. something written that can be reviewed, revised, reviewed, revised many times before making the move to take the final step of opening one’s doors.
It has been my experience that as one begins to put down one’s thoughts on paper it becomes evident that there are some “holes” that need filling . . . holes that if not filled will cause the ship (nee the business) to sink. In addition, as one goes to gather the information needed for a plan, their ideas are very likely to change. Few businesses, even those with a business plan, end up doing what they originally thought the business would be doing.
Strange as it may seem, the product or service may be right, who might use it may be different from what was first imagined. Or, it could be that the market is right but the product or service does not fit what the market needs or wants. The reason for this is that people going into new businesses either do not know who their potential customers might be for their product/service or they have the wrong product/service for the market they are thinking of.
Going through the process of developing a business plan is necessary even if outside funds are not needed, as it will ultimately show if there is a mismatch between the idea and reality.
So, now, why is it that so many people go into business without doing a business plan? I believe there are many reasons. The one you mentioned is one reason that most people wanting to take the move to going into business is that they are not schooled in business much less not having an advanced degree in business. Even worse, there are very few tools to ease those who are “uneducated” in the world of business into the planning process step-by-step. Most of the tools are too academic or the book or template for doing a plan looks so ominous, that the step is put aside.”
Give us your thoughts on the subject……..