“Everyone has a plan until you hit them in the jaw.”
Mike Tyson once said:
“Everyone has a plan until you hit them in the jaw.”
From year-long rolling budgets to half-day “hammer-it-out” expenses, there are entrepreneurs who record everything. They make notes, they prepare excel sheets and they document the mission and vision of their startup even before it actually turns into a reality. On contrary, there are some who focus on planning instead of a written plan itself. What makes startup run smoothly? Does business plan work? Let’s find out
What a Business plan can do?
When it comes to planning a business, there are many factors that need looking into. Writing them down may be useful in the long run, but for some, it might be a hassle.
But, what a business plan can do is, tell you if your assumption is correct or not If, for example, you have a total of 1 million in the budget for marketing. A plan will contain all the different strategies to spend that money in the right place to get the best profit margin for your business. However, if you spend that money in the wrong place at the wrong time, your business can go through huge losses. We all want to play safe and business plan is another way to foresee what might happen.
Business plans vs. business planning – choose wisely
In an ideal world, If we take setting up a business as an example, we all want everything to go “as planned” and we try to do all our research before actually taking a move. A business plan is the translation of this research to help predict the future before it even happens.
When it comes to actually drafting the business plan, every startup does it differently. Some entrepreneurs hire professional business plan writers like OGS capital to do the job, some follow business plan templates, while some document it with the help of their team.
Also read: From the expert: How to write a business plan that works
Whatever you choose, many questions arise in their minds. Is it even necessary? Why should we spend so much time writing a carefully drafted business plan when we can just gather business planning in our mind, do our research and implement it as we go?
On the other hand, some believe that their business plan is the most important part of their business as it has all the predicted disasters and a counter strategy to fix them. It contains a detailed working of the entire business before it even launches.
Different entrepreneurs from all around the world have different takes on the idea of writing a business plan. Each of them has a different story and a different experience. Let’s see what they have to say.
Business plans improve odds and outcomes
“There is enough statistically relevant research available concluding that business planning improves odds and outcomes, but there is enough anecdotal evidence on social media and from reputable publications to suggest that most businesses don’t plan because it’s too complicated. The prevailing institutionalized mindset is that complex plans enable access to capital. We develop extremely detailed business plans that are meaningful to underwriters (lenders and investors), but otherwise meaningless to the business the plan should serve in the first place.
The plan document itself should merely be a bi-product of defining in simple terms what success means to you and the actions you will take to achieve it. The real on-going benefit comes from recording results and continually modifying the planned actions based on what you learn/experience. That is the difference between developing a plan and strategically managing a plan.”
– Jon Umstead, Founder, Plan Canvas; Author, Business is AR
Every plan goes obsolete in 2-3 months
“We are currently in the early stages of our Startup, and my thought on a business plan is that they are a waste of time. A strong one pager covers all the facts from a business plan, all the rest are speculative numbers and forecasts. This has a number of shortcomings. First off, if I stick to the business plan, chances are my business will fail because that means I’m looking at the plan and not the real world, and second, If I waste all that time on a 2-3 year plan that will likely be obsolete within 2-3 months, I have a serious prioritising problem.”
-David Yahid, Founder, and CEO of Sparkly
Business Plans are useful but get restrictive when it’s time to pivot
“A business plan can be useful for organizing one’s thoughts and plans around one’s business, but can also be unnecessarily restrictive and unhelpful when it’s time to pivot. Create one, but don’t become wedded to it forever.”
-Yuri Kruman, CEO of Master The Talk Consulting, Startup Instructor at 2020Startups
Business plans are misfit for startups
“Business plans are often deemed a misfit for startups; rightly so. Startups will pivot every day. That’s a fact of life. Whether it be a product change or a new partnership that will take your company into a different direction. Nothing will ever be certain. Although it feels safe to have a set of goals and ways to reach those goals successfully, the reality in Startups is completely different. Nothing will go exactly to plan. Is a business plan needed? Absolutely not. Would it be a good idea to have one? Yes. Personally, I still like the idea of having some guidelines on procedures, overall business model, values, and strategy.“
– Moritz von Contzen, Founder & CEO at Avenik
One page business plan works best
“I believe that there will always be an important place for a business plan, but not in the traditional sense. A 17-page plan that is done once and filed away loses it’s relevance immediately, but a one-page plan that highlights the direction for the next 12 months becomes invaluable.
A one-page business plan that can be kept, referred to often, and adjusted as needed is a great way to map the direction and goals of the business.”
– Melissa Withers, Social Entrepreneur at Melissa Withers
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