Feb 19, 2011

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Posted Under: Tips & Tricks!

I recently read this article “Starting up… Without a Business Plan” on Wall St. Journal Blog, where Colleen DeBaise with the example of a successful entrepreneur who decided to not write a business plan, raises a very interesting question.

Are Business Plans a waste of time?

First of all, I really enjoyed the write-up as well as some of the very insightful and thought provoking comments!

Now, as someone who has done both, started and run a successful business without a formal business plan in the past and someone who helps people start businesses and write business plans, I find this topic very intriguing. To quote a particular commenter –

“Last but not least, W. Randall Jones wrote the book, “The Richest Man in Town,” which profiles 100 of the wealthiest people in their respective towns across America (including Warren Buffet’s often forgotten co-founder). They are all entrepreneurs. The poorest among them is worth $100 million and all of them say business plans are bunk. Maybe they’re just the most talented, action-oriented, focused entrepreneurs around and so they didn’t need a plan to execute well. But there is something to be said for their unanimous opinion.” – Felicia Joy

Makes us all wonder, what is it about some of the entrepreneurs that they can start, run, and succeed without a business plan and some would fail even after having the fanciest business plan ever? While I may not have an absolute answer to that question, here’s what I’ve observed:

1. The entrepreneurs who looked at business plan as the low hanging fruit, “I’d write a business plan, raise money and be rich by next year” were always the first one to complain “the business plan is a waste of time” simply because it did not serve their get-rich-quick purpose and they had nothing else to blame their failure to.

2. The entrepreneurs who looked at the business plan as a critical element of the startup process, did proper research and wrote the business plan but for what it is needed and not just for a bait to fish an investor, never complain “Business Plan is a waste of time” regardless of the outcome.

3. The entrepreneurs, who accepted the fact that “we are in this alone” (no need or intentions to raise much capital in the traditional way) at least to begin with, or until they prove their idea or model, were the ones who had the liberty to test and implement their ideas as they go and these were the ones who if failed, couldn’t  put the blame on the business plan because they didn’t have one to begin with, and if they succeeded they definitely went on to argue “business plan is a waste of time” simply because they succeeded without one.

So, is a business plan really a waste of time?

I don’t know and I believe nobody but YOU, the entrepreneur, only knows or will ever know if your business plan is (was) a waste of time or the best use of your time? However, I’d like to take this post as an opportunity to remind and request each and everyone of the aspiring entrepreneurs, not to see the business plan as a low hanging fruit, or a document that you just write once and blast it out to bunch of banks and investors to see if someone takes a bite…  Look at it as a blue print that you need to develop before you lay the first brick, look at it as a map that will give you the directions to move forward in your entrepreneurial journey, look at it as an extensive to-do list for implementing your ‘otherwise-sitting-in-your-head’ ideas, instead.

Wishing you all the best in your venture, with or without a business plan!

Suggested Reading: NEVER Write a Business Plan (YoungEntrepreneur.com Blog)

Success to all!