In the first parts of this series, I talked about two important aspects of launching a new business: choosing the right kind of funding for your startup, and picking the right people, whether they’re partners, staff or both. For my final trick, I’m going to bring up a few thoughts on business plans, both pro and con.
The first thing you have to know is that not every successful business starts with a successful business plan. There are both good and bad reasons to spend time writing a business plan. And if you’re going to spend your most valuable resource—time—on a monster document, you have to make sure you’re doing it for the right reason.
Reasons to write one.
So what’s a good reason to write a business plan? Well, if third-party investors (read: those other than friends and family) are interested in getting involved, a well-written business plan is a good way to demonstrate your grasp on the market, competition, infrastructure, finances and other important aspects of a new business venture.
Even if you’re not planning to seek funding from the very beginning, using a business plan to crystallize your thoughts, give shape to your ideas and calculate upcoming expenses so you can plan ahead is a great idea.The process of writing a good plan is not as daunting as it sounds. A quick search will bring back more than a few offers of assistance with your new business plan, giving you a good place to start without the paralyses we’ve all felt while staring at a blank page.
You’ll find that, once you start writing, the process gets easier. Let the passion of your new ideas spill onto the page, and remind yourself not to judge your writing during the process. Editing is the step you take only after you’ve given yourself the freedom to brainstorm, editorialize and make a few mistakes.
Reasons to not.
Ok, that’s the good part, here’s the downside. A business plan can kill a business. Or maybe it’s more accurate to say that one’s attachment to a business plan can be deadly.
When Ralph Waldo Emerson said, “ A foolish consistency is the hobgoblin of little minds...” he might as well have been commenting on the myriad of businesses brought to their knees by their executives’ unwillingness to deviate from a plan conceived in another place and time.
A good business plan is a great way to start a business. But it does not necessarily follow that it’s a good way to run a business. The moment you dip your toe in the water, you are changing the nature of the pond; the concentric circles that emanate from your point of entry create tidal waves of change.
Your job, then, is not to hold fast to the best laid plans of mice and men, but to act and react to the world around you as it shifts. Those who bury their heads in the sand, believing that even the best plan, if strict adherence can just be maintained, will get them through the hard times, are missing the point of modern business. Captains of industry are made by the strength of character necessary to know when it’s better to stand your ground, and when it’s time to obey the signs beseeching you to pivot.