For some reason, this stupid piece of advice has been the #1 priority for wannabe entrepreneurs for decades:
In order to start a business, the first thing you have to do is write a business plan.
Think of any reference to farm animal excrement, and insert that word here.
While there are certain exceptions to the rule, experts generally agree: skipping out on creating an official document outlining your plans for success could actually do more harm than good in both the short and long run.
The following are five reasons why writing a business plan is not be worth pursuing if you’re looking to start a small business. I understand how intimidating it may seem to forego a step that many “experts” say is crucial; however, by arming yourself with knowledge about why traditional planning practices may no longer apply for new ventures today, you can make more informed decisions when launching your own venture—and potentially save yourself from costly mistakes down the line!
1. Business plans are often based on assumptions and guesses, rather than facts.
The idea of writing a business plan can be daunting, especially if you’re just starting out. After all, the future of your nascent business is based largely on what’s written in that document. But as any experienced entrepreneur will tell you, having a static document like this is usually worthless – because the business world changes quickly and without warning.
What was true last month may not be so today; a market that seemed to have plenty of potential might suddenly become saturated or even decrease in size entirely for reasons outside our control (and often outside our knowledge). This means that no matter how well-crafted or detailed your original plan was when it was created, it soon becomes outdated and irrelevant thanks to factors beyond anyone’s control or prediction – such as natural disasters, political unrest, technological developments, changes in culture, etc..
Business plans are also usually constructed with assumptions about the future instead of hard facts and data which makes them prone to error should those assumptions prove incorrect.
Instead, put more focus into staying flexible and adapting your strategy according to what works best at any given moment — something far easier said than done, but key if you want long-term success as an entrepreneur.
2. Business plans are often overly optimistic.
Without years of experience in their respective industry or domain knowledge, most entrepreneurs lack the tools necessary to accurately forecast sales and growth over time.
Oftentimes what they present in their plans may not reflect reality when setting out on their entrepreneurial journey. This can be further exacerbated by other external factors such as economic downturns or changing market conditions that could render optimistic projections obsolete before even getting off the ground.
While having a clearly thought-out plan at hand, if mismanaged it can also lead to huge amounts of frustration down the line – after all you don’t want to set your expectations too high only for them not come into fruition later on! You are setting yourself up for disappointment and seeing yourself as a failure.
Despite being well aware that creating an accurate picture requires both resources and knowledge beyond those held by most startups, it would greatly benefit a hopeful business owner to have a consultant or coach on their team who can give them realistic expectations on how their business will grow and show more efficient means of reaching their goals.
3. Business plans are time-consuming and can distract from the important work of running a business
Starting a business is no small feat — there’s so much to think about, from creating an effective marketing strategy and hiring the right personnel to managing your finances.
While having a clearly-defined business plan can help give you focus and direction along the way, it’s important to remember that writing one takes significant time – often months!
If you are just starting out as an entrepreneur or small business owner, this precious time could be spent on activities that have more immediate impact such as networking with potential customers or suppliers.
Time is limited for new entrepreneurs, so instead of investing resources into crafting pages upon pages of professional documents outlining your mission statement and objectives (when some aspects might still be in flux), why not channel energy toward fostering relationships with customers and suppliers? After all – relationships will likely play a major role in the success of any venture. Taking risks isn’t always easy, but getting stuck in details at the outset may delay progress down roads where fortune favors those who take action first.
4. Business plans are often irrelevant to the day-to-day operations of a business.
Business plans are often written in haste as part of an exercise to feel like you are actually starting your business – but they become obsolete once you start operating your actual business.
They are largely theoretical exercises.
The reality of running any small enterprise means that owners have to constantly adjust their actions and strategies based on what is happening in the real world. This could be anything from market changes, new technologies emerging or customer feedback coming back immediately after launching something new.
Even if you had planned meticulously prior to launch day, chances are events will happen which render your original plans irrelevant anyway!
Business owners should stay agile during these periods; making decisions quickly and adapting their approach with each change in order ensure sustainability/growth over time – not relying on an old document that was made up before they even began operating!
While having some sort of general idea at first can be beneficial; spending too much time immersing yourself in creating a perfect plan may do more harm than good when establishing your own venture.
5. Business plans don’t guarantee success
When it comes to starting a business, many entrepreneurs feel that crafting the perfect business plan is all they need to guarantee success. However, while having a long-term goal in mind can be beneficial in the long run, there’s no surefire way of guaranteeing success.
In other words: investing time into creating an exhaustive business plan will not translate into tangible results or outcomes.
It’s important to note that having a comprehensive understanding of your goals and objectives is invaluable when beginning any new venture—however, ultimately relying on real-world actions and hard work (not just planning) will often lead to greater successes than simply sticking with writing a document.
That said, listing out various steps to get from point A (starting up) to point B (success!) can help you stay focused along each stage of your growth journey—while offering some much-needed structure and guidance throughout those uncertain first months or years in operation!
What to do instead of a business plan
The business plan you write should be two lines that answer these two questions:
- Where do I see myself and my business in X amount of time?
- What is my next step to get me there?
Answer number 1 will likely not change – or change very little – over time. When I started my business, I didn’t have any kids. However, by the third year, I did, so my #1 goal changed a little bit, but not a lot.
Answer number 2 should change DAILY.
Get up, write down your long term goal, then set your day’s goal. It may be buying a domain name. It may be getting WordPress installed and picking out a theme.
Do this every. Single. Day.
By the end of the week, you will have taken seven actionable steps that you wouldn’t have taken had you spent that time trying to craft the perfect business plan.
At the end of the day, it’s all about taking actionable steps, calculated risks, and pushing yourself beyond what feels comfortable—just like any good entrepreneur knows best!
So take heart: writing up that perfect “guaranteeing success” business plan might not be as necessary as you think after all! In fact, it is probably hurting you.
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