At CEO Blog Nation, June is Back to the Basic Month. In celebration of the month, Teach A CEO is covering the different aspects of the business plan. There is an ongoing debate about the business plan about whether the 30 page business plan is extinct. Some experts even advocate skipping the business plan all together and get to developing and testing out the product and service in the market.
Teach A CEO asked entrepreneurs and business owners their opinion:
No, I Haven’t Written A Traditional Business Plan
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Serial entrepreneur (11 companies, either co-founder or initial team member) and currently solopreneur. Have not written a business plan, at least not in the traditional sense. Business plans for new products or markets are pure speculation and a waste of time and effort that could go into selling or developing the product or service. A better approach is to identify the major bets being made, design tests of those bets, and get out there and learn from experience. Should all entrepreneurs and business owners have a business plan? Why or why not? If an entrepreneur or business owner is willing to think through their business in detail without the motivation of needing a plan, then they should simply think about their business strategy, risks, returns, etc. An *operational plan* may be useful, insofar as it gives you help identifying costs & measurable goal posts.
Thanks to Stever Robbins, Stever Robbins, Inc!
Yes, I Wrote A Business Plan
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Yes, I wrote a business plan. While I wasn’t seeking outside funding, I felt it was important to define my business model and serve as a framework within which I chose to operate the business. The business has evolved over the years, but I still have a general framework which includes products & services, how I’m going to reach my market, who my ideal client is, what kinds of companies I don’t want as clients, and so on. For example, I will not take on a client who is in the business of taking advantage of people or make their money off the misfortune of others. I don’t agree with that from an ethical standpoint, so I refuse to help them grow their businesses. The key is focus. Just like with your elevator pitch, you should be able to describe your business to a 5-year-old. Should all entrepreneurs and business owners have a business plan? Why or why not? Absolutely – and just the concept of writing out a business plan can seem daunting to the point of choosing not to write one. But it doesn’t have to be extremely complex. Especially if you’re funding it yourself, you don’t need to have every last detail in place before you start – it’s probably going to change at least somewhat anyway. For some businesses, their plan can fit on one page. For others, particularly in highly regulated industries, it may need to be significantly longer and more detailed. In general, the simpler your business, the simpler the plan can be. The more complex your business, your industry, your geographic distribution and so on, the more complex your plan will need to be. If you don’t use a plan, it does become more of a challenge to reach your business goals. It’s like a road map – how are you going to reach your destination if you haven’t chosen the path(s) you’ll take to get there? If you’re building a simple one-room log cabin, you might not need as detailed of a blueprint – but if you’re building a skyscraper, you’d better have all the detail you need to make sure it doesn’t collapse! The same holds true for your business plan. For a small home business, you probably don’t need a plan as detailed as you would for a global enterprise looking to expand further and go public. In my experience, one of the most important parts of a business plan is the marketing plan. Define your ideal client in detail and figure out how you’re going to reach them. Without clients, you have no sales. Without sales, you can’t stay in business.Thanks to David Wright, W3 Group Marketing!
Yes, I Plan With Mindmaps & Forecasts
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I have written many business plans and helped hundreds of people write their plans. Planning is key but the size of the document varies. I plan with mindmaps and forecasts. I help people write plans for presentations and for use. Should all entrepreneurs and business owners have a business plan? Why or why not? Yes, because without a plan they will forget what they were thinking when they started and will fail to appreciate their evolution.
Thanks to Roberta Budvietas, Budvietas.com Ltd!
I Never Wrote A Single Business Plan
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I never wrote a single business plan. I never needed to, as I had the startup capital (which was always small) for all my own businesses, so I didn’t need to justify any of my ideas to anyone in order to get money. I had all my ideas in my head. I just intuitively knew how to make money. Should all entrepreneurs and business owners have a business plan? Why or why not? I think some entrepreneursshould have a business plan and some may not need it. It depends on if you are borrowing money for your startup, then you definitely need one. And if you tend to be disorganized or easily distracted from your goals, then you also need one. But if you have laser like focus and your business is relatively simple, I don’t believe it’s required. In fact, I know it isn’t, I’ve done several successful startups and never written a business plan.
Thanks to Aimee Elizabeth, Author of Poverty Sucks! How to Become a Self-Made Millionaire!
No, We Believe ‘Planning Is Guessing’
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No. We believe ‘planning is guessing’, especially in a unpredictable startup-type business like ours. We were very much influenced by the writings of Jason Fried, the CEO of 37 Signals who wrote in his book ‘ReWork’: “Unless you’re a fortune-teller, long-term business planning is a fantasy. There are just too many factors that are out of your hands: market conditions, competitors, customers,the economy, etc. Writing a plan makes you feel in control of things you can’t actually control.” Should all entrepreneurs and business owners have a business plan? Why or why not? Some should. If you are starting a big, complicated business that needs multiple inputs from multiple suppliers, such as a small factory, then you need one. But if you’re doing software, like us, and it’s pretty simple at first, then you don’t need one.
Thanks to Duncan Murtagh, Vetter Suggestion Box!