Are Business Plans Over-rated?
October 14, 2008 in General Information
There is a very interesting post by Steve at My Wife Quit Her Job where he discusses the pros and cons of Writing A Business Plan:
A False Sense Of Accomplishment
Whenever I’m excited about an idea or business prospect, I tend to view things through a pair of rosy colored glasses. I used to put together these intricate graphs(which always go up and to the right) to describe how much revenue that I thought I could pull in along with an optimistic prediction on the growth rate. I used to write down a detailed plan on how my business was going to proceed based on very little practical knowledge that I read about in books or online.
I would then obsess over the plan and my imaginary numbers and feel like I’d be already 80% of the way there. Putting something down on paper always carries the appearance that you’ve done something, even when you really haven’t even begun. There are too many unknowns and writing them down isn’t going to make them go away. Are you worried that you might be overlooking something by not writing it down? Don’t be. You will be missing a hell of a lot more than you think you are no matter what you do.
In the Comments for that post, one reader states that a business plan is essential for getting financing. To which Steve replies:
There are two types of business plans, external and internal. In the case that you’ve pointed out in regards to getting loans from banks and other financial institutions, you are correct. An external business plan is absolutely necessary. The type of business plan that I’m referring to in this article in more of an internal one. I’ve just found that most people write a business plan just once and never look back at it ever again.
Ready, Fire, Aim!
What do you think? Are there too many variables? Is it better to follow the philosophy of “Ready, Fire, Aim“? Is it better to just get started and then measure, modify, and market?
