If you ever thought about starting your own business, you probably read tips for aspiring entrepreneurs: what to look for, what points to consider, what to do first and what last. And one of the most important points was the availability of a business plan. Allegedly, without this serious document, a businessman cannot succeed in developing a startup.
Perhaps it was ten or fifteen years ago, but today the times have changed. Tips that were relevant yesterday were already outdated today. Now, modern experts and financiers assure us that we should not waste our precious time on a business plan. Why? There are six reasons for this.
Having a business plan strips of flexibility
Business plans are tied to the exact moment when they were created. It does not take into account dynamic, fast-moving market changes, economic conditions. Actually, these documents are intended to predict the unpredictable. As we understand it, in this case, "the mission is impossible." Any miscalculation will invalidate the business plan and make it illiquid.
You never know what you will face when you open your business. You can objectively assess the current situation and discern trends only in the first few months after launching a startup. Well, a business plan will not allow you to be flexible in making decisions. As a result, dry numbers and calculations will be broken into fragments, faced with reality.
A waste of time
When you sit down to write a business plan, you will feel like a student at school or a student at a university. This is a terrible feeling, like an adult working person. You will spend a lot of time on calculations, on correctly drawing up schedules and even correctly formulating proposals. Indeed, it is: but at school you would expect to get the top five, but here you expect to interest and attract investors. It’s hard to imagine your disappointment when you see bored faces instead of enthusiastic comments and surprised looks at the presentation. Believe me, investors also do not need these tons of paper.
You will forget about the business plan as soon as you write the last sentence
This is what most people do. It seems that he wrote a business plan, put a “tick” as if for himself that, they say, he had fulfilled one mandatory item, and forgot about the existence of this meaningless document. But even if at first you decide to stick to a business plan, then later, once faced with inconsistencies, you will also put it in a distant box. The fact is that after making the slightest changes to the numbers, charts, etc., you will have to, in effect, rewrite it again. After all, all your previous calculations will collapse like a house of cards.
Business plans dictate an action plan
This is the most dangerous consequence, especially for obligatory and consistent people who are used to doing everything according to the “instructions”. You will be guided exclusively by the business plan and be guided by the numbers you invented. You will wait for some results, but they will not be, because no one can predict the outcome of such an enterprise. As a result, this same business plan will become a trap, because, relying on it, you will ignore the current situation in the market. Such isolation from reality will inevitably lead to a startup fiasco.
Business plan does not attract venture capital
Many start-up entrepreneurs are working hard to create business plans, because they naively believe that they can attract venture capital. Unfortunately, these are empty hopes. Economist Carl Schramm claims that only one percent of startups receive funding from investors. This is terrifying statistics, so you should not rely on outside help, relying solely on a business plan. Perhaps earlier there was a greater chance of getting venture capital. Today, there are so many businessmen and startups that they really do not have enough investors.
So instead of sitting and composing this meaningless document step by step, it’s better to go to all kinds of conferences, presentations, meetings. Perhaps it is there that you will be able to make profitable contacts. By the way, did you know that giants such as Facebook, Apple, American Airlines, Amazon, Microsoft, did not have a business plan before the opening?
Business plans create a false sense of security
When something starts to go wrong after starting a startup, you can ignore serious signals, because you will be sure that in the end everything will turn out exactly as you described in the business plan. This is one of the most common mistakes of novice businessmen.
Unfortunately, despite the fact that you put all your heart and soul into the document, that at night you did all the calculations and verified the numbers, it does not mean at all that it is useful. However, a person has a false sense of security, which ultimately leads to the collapse of a startup. It’s better at first to admit that the document is useless than to watch with horror as your business sinks.
Instead of a conclusion
A complete rejection of a business plan does not mean that you should recklessly run a startup. Planning, market analysis, competitors - all this, of course, is necessary, but not in such detail as described in the document. Forecasts are also useless, that by the first year you will get such a profit, by the second - twice as much, etc. Do not waste your time and energy creating a business plan. Instead, focus and navigate in the current situation.