Is there any point in a business plan?

olly_springs · 09-09-2009, 03:42 PM

I've never needed to do a plan, as I've never looked for investment, and while I keep a huge set of notes about what I plan to do over the next few months, I'm always editing my plan as things never go exactly how I wanted.

I just think that doing a long term plan and including things like financial forecasts is always a waste of time, as it will invariably be incorrect.

Was wondering what other people think?

ethansmith · 09-09-2009, 03:57 PM

You said

Quote:

I'm always editing my plan as things never go exactly how I wanted.

I tend to be in the camp that says business plans are necessary. If you had made a business plan you may have been able to keep things going so that they ended up exactly how you wanted.

Also, business plans aren't just for presenting to investors. I use business plans to tell me whether or not it would be worth it to create the business. For example, if I create a business plan for a battery shop - but my business plan shows that it will only make $30,000 a year then it shows that a battery shop is not the best business to start at this point.

my_misyel · 09-09-2009, 05:53 PM

It is always a must to make a business plan to point out those things you want to consider in starting your business. Its more like of a summary of things you wanted to do in your business.

DPayne · 09-09-2009, 11:36 PM

Quote:

Originally Posted by olly_springs

I've never needed to do a plan, as I've never looked for investment, and while I keep a huge set of notes about what I plan to do over the next few months, I'm always editing my plan as things never go exactly how I wanted.

I just think that doing a long term plan and including things like financial forecasts is always a waste of time, as it will invariably be incorrect.

Was wondering what other people think?

I'm going to have to agree with you, business plans always seem like a waste of time to me. Atleast formal business plans like they teach you in school. I always have notes and documents ive typed up during my "brainstorming phase" and an idea of where I'm going. I don't ever plan on starting a business where I need outside financing, so I don't think i'll need to waste my time making a formal plan.

My biz partner and I both agree, had we written a business plan in the formal sense for our Publishing company when we started, we would still be printing a weekly newspaper and would have missed the opportunity in the magazine market we are currently involved in.

I tend to think sometimes business plans are for people who are scared to leap into business and its serves as a crutch for "analysis paralysis." You just need to know what you want to do to get started, know if its going to be profitable (without a 'business plan' i can tell you exactly how much money i'm going to make), and get rolling. Set sail now, and course adjust later. Planning doesnt teach you anything that experience won't and it certainly wont make you any money.

I'm about to have business theory guys with no real experience jump all over this post. Just watch.

SmallVolume · 09-10-2009, 03:37 AM

A brief directive plan should have, and other things should be planed while or before needed or happen.

ethansmith · 09-10-2009, 08:48 AM

Quote:

Originally Posted by DPayne

I'm going to have to agree with you, business plans always seem like a waste of time to me. Atleast formal business plans like they teach you in school. I always have notes and documents ive typed up during my "brainstorming phase" and an idea of where I'm going. I don't ever plan on starting a business where I need outside financing, so I don't think i'll need to waste my time making a formal plan.

My biz partner and I both agree, had we written a business plan in the formal sense for our Publishing company when we started, we would still be printing a weekly newspaper and would have missed the opportunity in the magazine market we are currently involved in.

I tend to think sometimes business plans are for people who are scared to leap into business and its serves as a crutch for "analysis paralysis." You just need to know what you want to do to get started, know if its going to be profitable (without a 'business plan' i can tell you exactly how much money i'm going to make), and get rolling. Set sail now, and course adjust later. Planning doesnt teach you anything that experience won't and it certainly wont make you any money.

I'm about to have business theory guys with no real experience jump all over this post. Just watch.

The way it sounds here, you still build business plans - just not in the formal sense. I am an advocate of developing business plans. However, I agree with you in the sense that they don't have to be formal academic (and albeit boring) ones that professors mandate in "entrepreneurship classes". I am against starting businesses blindly based on just an idea and no research.

As long as there are some general ideas and strategies behind the business idea as well as a few solid statistics proving that I will make some money, I am willing to leave the details up to experience.

BusinessAdviser · 09-10-2009, 04:37 PM

Depends what your purpose is. I've started businesses ranging from no business plan to just a marketing plan to a full-fledged business plan. It really depends on what you're trying to do. There are pros and cons to any situation though. While some may view it as a waste of time, others find that it helps identify areas that need consideration.

GlobalWealth · 09-11-2009, 05:06 AM

Unless you are raising money, I see no need for a formal business plan. The only thing guaranteed in business is change. If you create a business plan, it will change and it can become a distraction to keep the biz plan current.

this is not to be confused with business planning. I would always recommend goal setting in the short term (1yr) and strategic planning on how to accomplish the goal. But a formal business plan is for raising money.

olly_springs · 09-11-2009, 08:56 AM

Thanks for all the replies, I was half expecting to have a load of people moaning at me for suggesting you don't need a formal plan, but it's nice to know how many people with real experience agree with me. Just shows what a waste of time business lessons at school are!

I've always kept notes on what I intend to do in the future, and I suppose that does count as a business plan. I do take the other side of the argument though, that had I used formal business plans I may have stayed on track and things wouldn't have changed, but it was interested to note that someone said if they'd had a business plan they'd have been too inwardly focused and would have missed an opportunity.

ethansmith · 09-11-2009, 08:12 PM

Quote:

Originally Posted by olly_springs

Thanks for all the replies, I was half expecting to have a load of people moaning at me for suggesting you don't need a formal plan, but it's nice to know how many people with real experience agree with me. Just shows what a waste of time business lessons at school are!

I've always kept notes on what I intend to do in the future, and I suppose that does count as a business plan. I do take the other side of the argument though, that had I used formal business plans I may have stayed on track and things wouldn't have changed, but it was interested to note that someone said if they'd had a business plan they'd have been too inwardly focused and would have missed an opportunity.

Excellent summary. Thanks for the great discussion!

peteVA · 09-11-2009, 10:44 PM

I attended a seminar with a number of venture capitalists in a round table discussion and the general feeling was that a plan on the back of an envelope or napkin by someone willing to sign away the rights to their first-born was worth way more than a detailed professional plan by someone whose main interest was in isolating their assets and risking others.

Jwright12382 · 09-15-2009, 08:34 AM

There should always at least be a set of strategic plans and long-term goals...you can call them just that (and not a business plan )

Live fast and loose and something will eventually shake out...hopefully it's not your financing (because you forgot a note was maturing) or operations.

bigingod · 09-16-2009, 09:50 AM

You're correct but you for sure need a plan to track performance and success. A plan is a pointer to your goal. Still make and keep to plans and never be rigid but flexible especially towards short term plans.
Thanks

inle · 09-16-2009, 11:51 AM

Plan to fail or fail to plan?
I think that even those who mentioned that they don't do business plans, in fact they do..

Some of us do it in an informal way, in notes format, napkin or even in our own head..
It is still a business plan, in another form..

Jwright12382 · 09-16-2009, 12:12 PM

So what do you do when you're launching a project with a line of credit and the bank requires receipts and detailed descriptions for all draws...do you tell them "Its alright..I've got it ..**give a little knock on the head** it's all up here Jim." If you've started-up enough business and launched enough successful projects, maybe your relationship with your lenders is SUPER TIGHT...but, for the other 99.98% (as of the end of '08) that stuff's not gonna happen. You won't be able to propose $100K (and I could be wrong) in funding for a new marketing campaign with your operations spelled out under a ketchup stain (or catsup, w/ e)

EDIT: I don't think that's a bad way to get an investor interested at dinner. I actually think that most great endeavors begin with just an idea sketched/jotted down somewhere. Most of the time over dinner or drinks. But, just saying--when playtime is over at the bar..come monday, your buddy will PROBABLY want to know how you make those crayon ideas "WORK". Maybe they will, but goodbye longevity.