Entrepreneurs should not write business plans because they are too rigid and paint a false future picture. Instead, entrepreneurs should focus on creating a vision for their company that They can accomplish in the near or long term.
When might it not be necessary or even advisable to write a plan? Is a question that entrepreneurs have asked. There are many reasons why an entrepreneur should not create a business plan.
Published on the 15th of December, 2009. Today, I read an article on the New York Times blog that explained why every entrepreneur should create a business plan. According to academic studies on the startup process, many entrepreneurs never build a business plan. These studies also indicate that starting a business plan helps entrepreneurs in various ways, including increasing their chances of inventing a new product, forming a firm, acquiring raw materials, generating revenue, and surviving over time. Writing a company strategy has a beneficial effect, regardless of what measure of success academics have looked at. However, writing business plans are something I despise! I’ve launched a few businesses but have never prepared a business plan. Now, you might argue that this is why so many of my companies failed, but I could counter that I’ve still made a profit.
Some reasons for not creating a business plan :
1. Business plans are not the same as financing
You’re thinking about creating a business plan if you’re attempting to obtain funds. I hate to be the bearer of bad news, but I’m not aware of anybody who has successfully collected funds via creating a business plan. Approximately 30 of my closest acquaintances have received venture capital or private equity funding. None of them could obtain the funds by drafting a business plan. They made a PowerPoint presentation for the most part, and a couple even produced executive summaries, but they didn’t develop business plans. Remember that most investors are hesitant to put money into a “plan.” They want to put their money into a company that is already up and operating. You don’t have to be earning money to impress them, but they do want to see more than a piece of paper. Whether a prospective investor requests a business plan from you, ask them if they intend to study it thoroughly. They’re unlikely even to skim it.
2. You can’t know what will happen in the future
You may attempt to prepare for the future, but you’ll never be able to cover every eventuality. Things change, so why spend time creating a paper that won’t be relevant in the future? Why would you start drafting a plan that will never be finished if you want to take it to the next level? Your company will continually grow and change, and you’ll need to alter your business plan regularly to keep it current. When you first start your business, you’ll quickly discover that you’ll have to make many choices on the fly and depend on your instincts. No written document can assist you in any of these matters.
3. Time is a valuable commodity
According to the US New Business Administration, more than half of all small companies fail within the first five years due to a lack of money and expertise as an entrepreneur. As I previously said, creating a strategy will not assist you in obtaining capital. If you want to acquire experience, you should spend your time working on your company rather than creating a plan. The main reason I’ve never made a business strategy is that it distracts me from my work. I’m a person who gets things done. It’s a waste of time to spend weeks on something that hasn’t shown to affect my company’s performance. If you have a rough idea of what you’re going to accomplish and where you want to take your company, you should devote all of your time to doing it. Writing a strategy will only stifle your progress toward achievement.
4. The business landscape has shifted
Consider all of the things that have changed in the last year for a minute. Isn’t it true that a lot has changed? Take a minute to consider all of the changes in the previous ten years. You probably take many things for granted since so much has changed. Technology is constantly evolving, and the way you run your company is no longer the same as it once was. However, the issue with business plans is that they have not developed in tandem with the corporate world. So, why would you waste time on something that is no longer relevant?
Conclusion
If you believe that having a business plan would improve your chances of success, you are mistaken. There are no statistics to back up the claim that creating a business plan would help you succeed. So, save your time and do yourself a favor. Finally, I’d want to leave you with these thoughts from Steve Rappaport. Many of today’s successful companies would fail to pass an academic examination. The business Red Bull is an excellent example. Without the benefit of hindsight, the plan is riddled with flaws. I can picture the reactions — didn’t we call it “jolt cola” or “entrenched drink rivals will smash you if it ever gets popular” in the 1980s? I believe that having a strategy is important, but allowing for serendipity and possibilities in the company is much better. To put it another way, you’re deviating from the plan. The original goal of Red Bull was to create a beverage for long-haul truck drivers. There are many reasons why an entrepreneur should not write a business plan, including the time it takes to write, the cost involved, and the lack of use.
Frequently Asked Questions
When should you not write a business plan?
When should you not write a business plan?
Why startups should not write a business plan?
A business plan is a detailed document that outlines the company’s strategy for success. Plans are often written in the form of a narrative, and they typically include a vision statement, mission statement, market analysis, financial projections, and more.
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