P12-117: You Don’t Need a Business Plan

Project 2012: Day 117

Legend has it that Harvard Business Professors have surveyed start-ups and small businesses over the last decade to determine what the very few that survived beyond five years had in common.

One thing.

Not the CEO, Vision, Mission, Culture, Management Style, Funding, Market, or Economic Environment.

The one thing that successful start-ups had in common was the lack of a business plan.

Now that’s counter-intuitive.

I’m a firm believer in planning. But not so much in having a plan. How does that work?

The problem with a business plan for a start-up is two-fold:

  1. Generally the plan isn’t for you, it’s for your financier. Whether they be an investor, bank, or venture capitalist. Kind’ve like planning a wedding. It’s for the in-laws, and what really should be planned is the marriage.
  2. Perhaps because of point 1, the start-up business plan is full of assumptions. And sticking to the plan sets you up for certain disaster.

You do, however, need to plan. Again, a bit like a marriage. You probably don’t have a marriage plan but if you’re committing to a life with someone else, you do want to plan. Where you’ll live, whether or not to have kids, how many, who and how you’ll manage your finances, how you’ll deal with arguments, poverty, sickness etc.

A quick search on the Net will elicit a number of “one page business plans.” Use these as a template for sure, but remember everything you put in Excel before you start your business needs to be validated in your Accounting software once you start.

Customers don’t care about milestones. Just product.

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