Article Contributed by Lori Wagoner
We are all victims of doing what is being told. It just seems like it’s the easiest thing to do. It also appears to be the most natural thing to do.
It’s just a drill. It’s like all those parents preaching kids to study hard, get a job, get married, raise children, and grow old gracefully.
There’s nothing wrong with that advice, except that you never asked the kinds what they really wanted. If it’s lot of money that kid wants to make, a job is the wrong path. If the kid is a natural loner and prefers it that way, marriage can be a nightmare.
See where this is going? Everyone dishes out advice without really thinking about – or at least asking you – about what you want.
Thanks to that thing called the internet, this advice is now everywhere. Including business advice.
So, what’s the first thing you hear when you say you want to start a business?
A business plan, that’s what. We’ll see if it’s good advice or bad advice. We’ll also assume that you are starting your business for one thing that most businesses are out there for: profits.
Here’s why business plans can actually kill your business:
You made a business plan for what?
If you are like most businesses, you create that business plan in the hopes that you can attract funds to help you launch and run your business. You’d present the business plan to family, friends, and potential co-founders or partners. You’d pitch the sustainability of your business to a bank, a non-banking lending institution, or potential investors.
But when was raising funds a good idea in the first place? Lending institutions will watch your business like hawks and investors come snapping at you like sharks. In most cases, you give up equity and you are at their whim.
Also, there are numerous instances of people who did raise money “without” a business plan. Here’s Rob May who raised funds for his startup Backupify without a business plan, while drinking beer.
What if you wanted complete control on your business and what if you wanted to “bootstrap” it?
Business plans are scripted. Is your business scripted too?
So you sit and think. For hours, days, weeks even. Then you’d put everything you know on paper. You’d do sales forecasts, finalize systems, and design processes and workflows. You’d include hiring plans, financing ideas, and a lot more.
So, what happens next? You’d ideally start your business. You’d try to follow the plan; you’d set things in motion.
The trouble is that we aren’t operating in a vacuum here. You start of well but rarely do things go as planned. Things change quickly. There are too many externalities out there for you to battle with.
It could also turn out that you might realize that a viable market for your business doesn’t even exist. So, you might have to pivot. Change courses. Change everything.
So what happens to your business plan? You’d need Plan B, C, D, or maybe no plan at all. You might just have to improvise and fly without a handle.
Suddenly your business plan doesn’t sound so sexy after all, does it?
Business plans are an opportunity cost
Paul B. Brown of Forbes.com puts it right: in the time you take to do a business plan:
- You are still out of the market.
- You are looking to convince instead of looking for “fit.”
- You are giving others an opportunity to race ahead.
- You are barely noticing the market that’s changing.
- Meanwhile, there’s no revenue. No cash flow. Nothing else to show for it.
Planning time could be selling time
How long did you take to create your business plan? What happens when you use this time to go out and actually get some paying customers? What if you decide to go against the grain and hustle to get paying customers (not free birds, beta testers, or enthusiasts)?
This is time better spent. Also, paying customers give you the best, most actionable feedback compared to friends, family, and strangers you managed to get on social media to “try” your new product, before launch.
Finally, selling instead of planning helps you get into the flow and helps you decide if entrepreneurship is the best thing for you.
Planning distracts you from execution
Businesses fail, all the time. We all know that. We also rally around everywhere we go that “it’s not about the idea; it’s about the execution.” Why then do we labor so much on making plans that are likely to be changed soon? Why script something when you have to improvise anyway?
Business plans, on top of it, stifle creativity. These documents, spreadsheets and presentations kill any hope of your improvisation, standing on your feet to think, and deflect you from thinking about creative solutions to absolute certain problems that’ll pop up sooner or later.
Execution is critical to success. You’ll probably fail in spite of that.
Planning is good. So do spend a day with planning. Business plans can be on the back of your tissue or as a scribbled note on Evernote. For all that matters, it could be in your head or on the beach sand.
Business plans do have a purpose. But dwelling too much on just “planning” without doing something constructive isn’t going to help at all. You could be planning all your life and you could be “planning to fail.”
One quick way to know if your business succeeds or fails is to launch quickly. Get paying customers, and then work your way up from there.
Product or site launch is so simple today. Services and platforms like Shopify make it easy for you to set up a whole ecommerce store complete with templates with responsive design, point of sale systems integrated with mobile devices, credit card processing with no waiting times, shipping and customer service options, and everything else you need. Then what’s with the big “preparation” for the launch?
You could write a business plan after you make enough to do nothing maybe?
Think about it.
About the Author
Lori Wagoner is an independent content strategist who gives online marketing advice to small businesses. Lori has blogged at Tweak Your Biz, The Social Media Hat and many other business and tech blogs. You can reach her @LoriDWagoner on Twitter.