Just How Important Is Your Business Plan?
Let’s face it. The millennial generation has reached the entrepreneurial stage and a lot of millennials are quite distrustful, if not outright suspicious, of business plans. There’s just something about the phrase “business plan” that evokes all sorts of unhappy images of older generations. They think that it’s quaint, antiquated and essentially belongs to an earlier time.
While there is a lot of value to such criticisms, they really miss the point. The big picture here is that the business plan is not really created for investors. I know that’s probably shocking for you to read but that’s the absolute truth. If you’re writing a business plan because you just want investors, then you’re missing the point. You really are. Chances are, you might even be deluding yourself to the extent that you’re not really building a solid business. You’re just building a business around investments instead of the other way around.
I want you to wrap your mind around what I just said. I don’t want you to build a business around investments. Instead, the game is supposed to be played the other way around. Unfortunately, a lot of entrepreneurs write business plans just to get funding. That’s the whole point of the business plan as far as their mind is concerned. They completely overlook the real essence of the business plan. They completely overlook and miss out on the tremendous benefit the business plan really brings, not to them individually, but to their business.
The whole point of a business plan is to plan a business. You might be thinking that this is straightforward that it’s almost common sense. Well, it isn’t. You can assume that but it’s not very common because people, like I said, sit down and write a business plan just because they’re putting together a funding pitch. They need funding for their company. Maybe they’re raising 500 thousand dollars, one million dollars, two million dollars, so they come up with a business plan. That’s completely wrong.
The moment you think that you have some sort of hot idea is the moment that you’re going to have to sit down and write a business plan. Why? The plan is for the business. It’s not for investors. It’s not even for you. How come? Well, if it’s for you, then it’s going to validate or support or apologize for your hot ideas. No. That’s not what a business plan is for.
Your business plan is like a blender. You put the idea in there and then you slice and dice it based on economic and actual market reality. What comes out is the suggested form of your business. In fact, if you’re really honest, what comes out is an assessment of whether your business is even worth doing or not.
I know that’s quite sobering and in many cases, it’s quite unwelcome because, hey, who would not hate it if somebody rained on their parade? Here you are, all excited about the next big idea that will be the next Apple computers or next Amazon.com. You’re all pumped up, you’re all excited and then you go to this process of writing a business plan and then it turns out, as you do all the different parts of the plan, that it’s not as hot as you thought.
Instead of getting down back to business and nailing your idea down so it makes sense in business plan form, you hate the business plan. Now, do you understand why a lot of millennials are quite hostile to the concept of a business plan? This is your cue to write one for yourself because it may save you a tremendous amount of time, effort and energy.
How come? First, it might save you from a worthless waste of time. There, I said it. Some businesses are not just worth pursuing. Let’s get that out of the way. More importantly, it saves you a lot of time because you can then tighten whatever glimmer of a gem there is in your current business idea. Maybe your business can actually succeed as long as you keep reworking and fine tuning it and reforging it into a workable form. The choice is yours. You can either look at the business plan as some sort of blow to your ego or you can use it as a gateway to eventual business success.