Before a month, I watch an interview with Mark Zuckerback the founder and CEO of Facebook on BusinessInsider.com. In this interview Mark Zuckerberg tells that they don’t need, and also don’t have time to write the formal business plan. The same I’ve experienced in practice. While most books about entrepreneurship that I have read talk about the full formalization of the business plan, I’ve made a mistake several years ago as I was starting a business. Such theory which I call “plan business plan” is completely wrong and in some cases opposed to what the practice required.
My Bad Experience When I Plan My Business
When I start a business, I have a business idea and sit down to write a business plan. And I write it very well. It looked very good with different color charts, analysis, tables. I was proud of myself for my success in making a business plan based on what I have learned from school.
But, when I re-read the plan I wanted to improve and make modifications. Well, it looks great. I must mention that the business plan wasn’t required to find funds from a financial organization or a business plan competition, but it was needed only as a roadmap or guideline about growing my new business in the next three years.
In such a way I simply forgot that I should stop dreaming and start with real actions. I spent several months in which I always have something to improve on the business plan, and business normally didn’t start. After several months, I have realized that my very well written business plan with colorized graphics, charts and tables don’t have practical value. That business plan ended up in the garbage.
What Was Next?
After that, I sat down and made a new business plan. The new business plan doesn’t look so good as a previous that finished in the garbage with color graphics, titles, and contents, abstracts. But, with this new one I started the business, things have moved on. And after one month of the new business plan, the business began to bring revenue in my pocket. That business plan was simply made of:
- Actions that I need to implement in next period. These are simple bullet points with action steps I need to take to implement my plan.
- What is missing in the market? These are also several bullet points related to the market and what is missing currently as value to customers and missing relationships I want to build.
- How much money I have and how much I will spend on the startup level of my business. One sentence that describes my finance condition and plans to ensure appropriate financing for the future. Additionally, I have added several bullet points that explain how I will finance my new business.
- What will I apply as marketing tactics in the first and second year as a strategy? – Several bullet points that explain 3-5 tactic I will use in the future.
This was enough, and now that business operates well and brings income.
Dangers That Come When You Plan Business Plan
I will summarize three serious threats when you plan business plan:
- Plan business plan if you want never to start your business. The very first sentence says something inefficient and ineffective. Why must we make something twice? Plan to plan!! It’s nonsense. Planning as a verb is an activity for the preparation of future action steps. And if you want to plan, and you plan to plan and again plan to plan. That’s a dangerous circle that never ended.
- Too much thinking takes too much time. Planning requires thinking of what the future will bring to you. If we stuck with this thinking of future, then tomorrow will come, and we will need to re-think the future tomorrows.
- Too much planning, less time for implementation. If we lose too much time in planning, we’ll reduce the time for taking real actions. Someone will tell you that if you have a better plan for the implementation steps, you can spend less time in respect of the implementation. However, this isn’t a simple math. This is a theory of probability that deals with random events. One thing is, sure enough, we can never be 100% sure about what the future would look like. If the business idea is worth to start, you don’t have a time because you have an idea now, but also someone else probably has a similar idea ready to start.
The Recommendations Instead of Conclusion
- You need the business plan because it’s the only instrument that can transform your business potential energy stored in your business idea into business kinetic energy. However, the type of the business plan will depend on the purpose of that business plan.
- Avoid templates. I have a lot of templates that I found on the internet. However, my bad experience tells me that nobody can make a better plan than the entrepreneur alone.
- Be specific as you can in the business plan. With this, we can easily compare real results with the planned.
- Make it simple and understandable primarily for you and your employees. However, you’re the only one who will deal with implementation.
- Formalize only when you compete for finances at the financial organization, or if you participate in a business plan competition. In such a case when it came time to realization adjust it to your needs. However, you as an entrepreneur is the central figure in your business.
- Let your business plan serve as a roadmap for you and movement of your business.