Is your inability to write a business plan stopping you from starting a business? If YES, here are 10 undisputed reasons why business plans are a waste of time.
Many business experts will tell you that one of the first steps towards starting a successful business is to write a business plan. Business consultants, investors, VCs, bankers, etc; all over emphasize the need for a business plan before venturing into any business.
However, it is a known fact that to every advantage, there is a corresponding disadvantage. While I totally agree with the basic principle that planning prevents poor performance, I don’t go with those who hold that a business plan is essential to the success of any business. Rather, I go with the few who opine that business plans are a sheer waste of time. So in this article, I will be highlighting few points why I believe that business plans are a waste of time.
The truth is that a business plan practically goes obsolete the moment you finish writing it. Many things about business change all the time, but your business plan cannot update itself. Granted, the proponents of business plans always recommend that you update your business plan as changes are required. But rather than waste your time on tweaking and editing one document, there are many other things you could do that are far more productive.
Now, I have never said I am against business planning altogether. In fact, planning a business is very important. What I am against is the idea that the best way to plan your business is to write one long, drab document. To me, that idea is bullshit! I didn’t just choose my position. I have my reasons for holding that formal business plans are unnecessary. And here are 10 of those reasons:
10 Undisputed Reasons Why Business Plans are a Waste of Time
1. Business plans are excuses for inaction
I have seen many entrepreneurs spend months working on a business plan. When asked why it’s taking them so long to launch their business ideas, they say, “I am still working on the plan to ensure that I get everything right from the start.” To me, that’s a crazy excuse for not taking any action.
While adding up more and more pages to a business plan might seem like you are making progress, the truth is, until you take action, you have achieved nothing tangible; except writing a business plan.
2. Business plans are deceptive
I have met a few budding entrepreneurs who would boast so much about their business ideas and how they think it will be the next big thing when they launch. And when I once asked one of them how far he’s gone with regards to launching his business, he replied by saying, “I have made much progress.” Later during that chat, I found out that he’s never done anything other than writing a business plan. That, to him, was “much progress.”
Obsessing over the imaginary figures in a business plan makes you feel like you are already there. It makes you feel like you are progressing already. But in reality, you have not left a spot.
3. Business plans don’t really impress anyone
I have never been impressed by a business plan, and I know many other people—including business experts and investors—who have stated the same. No, it’s not because I hate reading long pieces. It’s because I don’t like spending my time on imaginary figures and projections that are mostly borne out of optimism—and that’s exactly what makes up most business plans.
Real business experts and investors don’t look at how “comprehensive” your business plan is. They look at how profitable your idea is in reality and how much experience you have. And you don’t necessarily have to write a huge document to prove all that. That’s why most funders can decide whether to support a business idea or let it pass after reading just the executive summary—of just 2 pages, at most—or after listening to a few words from the owner.
4. Business plans are inaccurate
The truth is that you can’t predict everything that can go wrong with a business, and you can’t understand the intricate details of running a business until you have actually launched it. When writing your business plan, you are more than likely to include rough estimates and vague guesses that are often optimistic and incorrect. In short, business plans are based on human assumption, and humans make mistakes.
5. One harsh reality can render a business plan useless
Imagine this: After spending several months to write a business plan, you are able to get your business up and going. But just three months after launching your business, your locality gets devastated by a hurricane and your office, warehouse, and store got badly affected. And you are left with nothing.
You have planned for burglary attacks, you have planned for other things that could go wrong with some aspects of your business. But you never planned for natural disasters that could sweep off all your business at once, like this one. So, of what use is your business plan, then?
6. Business plans take time
Yes, business plans are a waste of time because they take a lot of time; especially when you are trying to write yours to suit that crazy format that should be meant for MBA students.
Executive summary… business overview… products and services… management summary…blah, blah, blah. (I think whoever imposed that format on people deserves some spanking). You could have saved much time if you are not trying to be too formal. To me, even if you are to write down anything while planning your business, any logical format should suffice.
7. Business plans are useless without funding
Most people spend weeks to months writing business plans they have no funds to execute; and their reason for being so silly? They say writing a business plan gives them an idea of how much they need to start the business, so they know how much funds to seek.
If all a business plan will give you about the funds you need to start is just “an idea,” then I call that nonsense. A simple market research lasting few hours could have given you the same idea—or even something more accurate—and you could have spent those weeks and months trying to get the needed funds, instead.
8. Business plans could be limiting
Business plan proponents would suggest that you detail how you will run your business for the first few years, at least. However, this seemingly little mistake has slowed down some businesses by years and even crippled others. How? When a business plan already has it stated that the business will not divest or expand until after three years, the owners and managers discard any growth or expansion opportunity that comes earlier than that. To me, that’s just silly.
9. Business plans motivate perfection
Another reason I dislike business plans is that they motivate you to keep tweaking until the whole thing becomes perfect. And perfection is something no one can achieve. So, you will end up wasting so much time. The more you try to be perfect, the more you discover you have much more to do to achieve that.
10. Business plans don’t usually help businesses get funding
According to research, most business plans are not funded—for a wide range of reasons that I won’t discuss here. So, the question to ask is, why waste so much time writing a business plan when it’s not a surefire means to get funds? Something that would take so much time and still has the potential to fail in the end isn’t worth it.