So you want to start a business? Plenty of people will say you need a business plan. They’re wrong. The truth is that there is a better approach to starting a new venture in today’s fast-paced market.
If you hate the idea of spending hours at your desk fretting over rows of numbers, proceeding without a business plan might be right for you. Here are some reasons to get started on achieving your entrepreneurial dreams without stopping your flow to write a business plan.
The universe laughs at your plans.
Even the most careful business plans cannot predict the future. When you go into business, you need to be ready to adapt to new situations and change directions quickly. Sticking to a plan can limit your ability to respond and narrow your thinking. Sure, it can be useful to have an idea of where you want to go, but treating your business plan like a mandate can mean that you miss out on opportunities you didn’t expect—or end up heading down a dead end as if on rails.
Forget plans and embrace concepts.
Instead of a business plan, perhaps what you need is a “concept to test.” This is a modern, experimental alternative to the traditional business plan. Rather than pages and pages of detailed plans and calculations, all you need are these basics:
- The idea
- The value proposition to clients
- An offer
- Just enough marketing to test the concept
Come up with your idea, figure out who your clients will be and what you can offer them. Then get your product or service in front of just enough of those people to find out what they think.
No procrastinating. No slaving over a lengthy business plan. Just get out there and find out whether your idea will work and be flexible.
When you DO need a Business Plan:
Sometimes, a business plan is necessary. If you want to secure funding, you are probably going to have to knuckle down and produce a formal plan. But if you are getting your funding from family and friends, or you’re bankrolling the project yourself, a formal plan is not a necessity. If you are a freelancer with low set up costs and no need for funding, the plan-free approach is perfect for you.
Traditionally, business plans have stretched over between 20 and 40 pages. If you do decide you need a business plan, keep this one rule in mind: Shorter is better. Today, investors are looking for something much shorter and snappier.
Don’t be tempted to put in spreadsheets and graphs unless they are absolutely essential. Plan writing software makes it easy to stuff pages and pages of complex financial information into a business plan. Don’t do it! According to entrepreneurship professor William B. Gartner, “No one’s impressed by spreadsheets.” Wise words!
Limit your income, cash flow, and balance sheets to no more than five pages. Keeping your business plan short will increase the chance that potential investors will read it.
Business Plan or not…
Whether you decide to produce a short, stripped-down plan or launch into business without one, you need to be ready to think on your feet. Problems and opportunities will arise to throw you off course. Embrace the unexpected! If you can pivot and adapt quickly enough, your fledgling business is sure to thrive.