Don't write a business plan

http://blog.asmartbear.com/business-plan.html

by lrm242 • 17 years ago

26 15 17 years ago

blog.asmartbear.com

shin_lao2• 17 years ago

Good luck finding investors without a business plan...

At some point in time you need to formalize your business and why you expect profit. It's inaccurate, everybody knows it, but the exercise is healthy.

gthank• 17 years ago

He cites multiple investors that say not to do a business plan; that's an explicit part of his argument.

shin_lao2• 17 years ago

I'm not sure I'd like to restrict myself to investors that don't require business plans.

If you look for excuse to not do a thing, don't worry, you always find many.

dpcan• 17 years ago

He's arguing against this argument.

There are a number of VC types who say you don't need a business plan, but if you're getting funding from business associates, family, friends, or friend of friends, they will say "can I read your business plan".

fnid• 17 years ago

If you read enough articles like this, you'll find the following to be the rule of thumb: Do and avoid doing everything possible.

ionfish• 17 years ago

These articles always make me think of this Eisenhower quote: "In preparing for battle, I have always found that plans are useless but planning is indispensable."

loganfrederick• 17 years ago

This. The real value in creating a "business plan" is in the focusing of your business.

It isn't necessarily a good idea to go into business completely blind with no knowledge of who your potential customers and competitors are and what your revenue model is. Writing a business plan forces you to think through these key components.

The definition of a "business plan" should be flexible. I prefer to use three pages or less, single spaced. That's enough room to cover all the topics while keeping it brief.

There will be time to make revenue models and projections once you actually have some sales on which to base your calculations.

mikeryan• 17 years ago

Yeah I've written one business plan in my life as a final project for my MBA.

The plan itself was pretty much useless, I've never used it (note it wasn't just a project, I killed two birds with one stone by writing a plan for a business I have actually started, and used it for my final).

But the act of going through the steps was an invaluable learning experience.

orblivion• 17 years ago

The very act of running a business implies some sort of prediction that it will work. By his logic you should never run a business.

tungstenfurnace• 17 years ago

How's this: if you're starting a traditional business like house-painting or power generation then write a brief plan. Otherwise don't.

bretpiatt• 17 years ago

Most start-ups can get away without a written business plan because the founders have everything that would be in a plan in their head. In larger organizations you absolutely need to use them as the people deciding what businesses to be in aren't the people executing the ideas. So "Don't write a business plan [if you're a start-up]" is what the title really should be.

One thing to consider, write big goals / milestones down and ask yourself each day, "Is this activity getting me towards our next goal?" -- if not stop doing it. Without planning you can quickly get distracted by shiny objects and short term revenue.

If you're going to spend significant time on something that isn't a current goal have a quick chat with your team and get agreement to change the goals -- this isn't "writing a business plan" but this is "business planning" -- just because you don't do the former isn't an excuse to not do the latter.

skmurphy• 17 years ago

I agree with your point that some amount of planning is always useful in the face of uncertainty. It's only when things are certain or utterly routine that no plan is required.

"Most start-ups can get away without a written business plan because the founders have everything that would be in a plan in their head."

Even when the founders have it in their heads, writing up a one to two page set of key assumptions and objectives can uncover disconnects, and writing them down allows you to solicit input more widely from friends, employees, and advisors. No successful startup is ever just the founders: you are always asking prospects, customers, partners, friends, advisors, employees, and anyone else with relevant knowledge for advice and feedback.

steve___• 17 years ago

The mistake with business plans is the tendency to focus on the wrong objective.

I think creating a written plan for any goal of a startup is a must. It allows everyone involved to review the plan and point out any holes in your thinking. It also presents a complete communication of your ideas. Just winging it, for example, using a conscious stream of thought to explain all the details of a proposed plan is difficult for both the speaker and the listener.

The problem with business plans is they tend to focus on demonstrating how the startup intends to make money. Revenue should never be the goal of a startup. Revenue is a by-product. It's a measuring stick which co-founders can use an indicator of whether or not they are succeeding in solving the end-user's problem. The overall goal of a startup should always be to solve a specific end-user problem.

http://www.igeejo.com

jokergd• 17 years ago

found this article to be very informative and makes me feel better about having never made a business plan

vlad• 17 years ago

Let's do some quotes:... (then)

Surely those Harvard MBA grads are correct. After all they don't give out those MBAs for nothing — you have to at least start a business yourself! Oh wait, you don't have to do that? Oh.

None of those blog posts were by Harvard MBA's and nearly all links were to random pages hyping the Business Plan Pro product. Referencing a bunch of unknown posts at unknown blogs by mostly unknown authors to criticize Harvard's MBA program for not being entrepreneurial enough is ridiculous.

Later paragraphs were great though, and I appreciated seeing links to interesting entrepreneurial web sites that aren't usually referenced on Hacker News. Thanks!

Don't write a business plan

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