Do you really need a traditional business plan?

Chris Reddin
Chris Reddin

Business plans are one of those things that bankers request and college professors love.  They are the kind of thing that start-up businesses think they should write and growing businesses feel compelled to update.  But, let’s hold on a second.  Why go through all the work of putting ideas that are already clearly formulated in your head into Word document and binding it at the printers? Are business plans worth the time and effort?  The answer is sometimes yes; there are good reasons to do the business plan, and sometimes no; the plan is not worth the paper it is printed on. So, if you are considering a business planning effort, put some thought into how and why before you get started.

            The biggest flaw in any business plan is that by the time you finish typing and printing it, the plan will probably have changed and some aspect will need to be updated. In a rapidly changing world, it’s good business practice to know how to constantly change and adapt to market needs. As a result, a painstakingly crafted plan will become out-of-date quickly. Thinking that a traditional business plan– sitting on a shelf looking impressive with 25 or even 50 pages of facts and figures– can serve your needs for the next five years is simply an unreasonable expectation.  Business plans are most valuable when they are seen as a fluid document: something that gets updated, commented on, and improved on a regular basis.  Think pencil, not ink.  Don’t focus on how to get the business plan written, focus on how to use the plan to keep focused on your goals, to understand your customer, and to communicate your vision.

            Another downfall of the business planning process occurs when there is a disconnect between a business’ leadership and the actual effort that goes into creating the business plan. A business plan is a journey, not a destination.  The most important aspects of the plan are found in the learning that occurs when using a disciplined approach to evaluating every aspect of your business growth strategy.  There is tremendous value in taking the time to first look at the market and the target consumers, then matching the customers’ needs with your product offering, its pricing, and your customer service.  Once you have solidified the value proposition, think through how to market and communicate it to the customer.  The evolution of the business that occurs though this analysis and careful consideration is the heart of the business planning process. It is critical that the individuals who develop the plan and those who are responsible for leading the business are one in the same.

            A business plan is only truly useful when it is simple, flexible and easily accessible.  

One technique for writing a business plan involves bringing a small team together and crafting the plan on a whiteboard with sticky notes.  This model covers all the usual aspects of business plan development, but in a creative, unintimidating way.  The plan becomes fluid as team members move around the sticky notes, taking some down and putting up new ones, as new ideas develop and improvements are identified. A business plan does not have to be a bound document.  Sometimes, a few really good facts and figures on whiteboard are enough to do the trick.

            The simple process of taking an idea and putting it down on paper can hold value in itself.  An idea that appears to be pure genius in the middle of the night or in the shower needs to be examined in the light of day for validity.  Often times that spark of innovative thinking can lead to great things. I tend to get my “best” ideas on long runs, and although my ideas may seem fabulous while I am plodding down the trail, their real worth cannot be determined until I get back to the office, write it down and talk about it with my business partner. Take those inspirations, sketch them out, do a little market research, and see if they fit with your strengths.  Does it make sense in conjunction with everything else that you have going on?  If yes, then meld them into your plan to help drive your business forward.

            I love business plans and business strategy. If you are considering writing a business plan, please see this as an exciting and fun opportunity. Don’t think about it as a some kind of arduous dissertation; think about this as a time to be creative, to set some goals that you can get excited about, to create some really good stuff.