One of the hallmarks of a proper Business Plan prepared by a world-class Business Plan Company is being open to disconfirming information. Any reputable Business Plan Consultant will provide you with factual and informed recommendations on the hypotheses you made on your new business idea.
Now let us apply that principle to the decision on whether to do Business Planning itself.
As a budding entrepreneur, you may think you have a good business idea. I mean, all your friends and family members told you so. They were all excited when you told them about the next big thing that you will be starting! And yes, maybe it’s OK to do what most new business owners do all the time: wing it, and then adjust as you go.
So, what are the arguments against Business Plans?
First, if I am honest, most Business Plans that we come across are template-driven works of fiction, predicting a future that refuses to cooperate. 90% of the information is based on a hypothetical ideal future, underpinned by the business owner’s dreams and believes that this new business idea will never fail. In most cases, there is very little factual substance.
Secondly, a comprehensive Business Plan should not just be used to raise money. It will never guarantee that you will, in fact, be successful in raising the required funds. The Business Plan is merely the first – albeit most critical step – in the overall funding application process. It boils down to how prepared the business owner is to answer all the gruelling questions posed by investors. Whether he or she is well-informed and prepared. The Business Plan merely opens the door to that first interview!
Finally, if you have any chance of getting startup funding – and very, very few businesses do – then it’s the strength of your idea, relationships, and track record that will WOW investors. The Business Plan should be your biggest ally, your wingman, your best friend, but the Business Plan won’t close the deal! You must!
Remember, the Business Plan is vital, but Business Plans don’t succeed, people do!
So, should you go through a Business Planning process?
In my opinion, the answer is YES.
It forces your management team to get clarity and agreement on purpose, approach, priorities, and information gaps. That’s useful even if most of its assumptions prove to be incorrect. Even if it doesn’t help you raise any money.
In contrast, the “Wing It” model is a bit like heading on a trip without a destination, let alone directions. A good Business Plan provides you with a decent map with a big X on it. That will help focus your efforts on what you need to do to get there. And how you will adapt when you hit those inevitable obstacles. Do “enough” planning to serve your purpose, but don’t skip the Business Planning process entirely.