Comments on: You Don’t Need a Business Plan

By: dallonchristensen

dallonchristensen — Mon, 08 Mar 2010 01:11:00 +0000

Karri, this is an excellent post. The business plan itself is very overrated as a good management tool. However, business planning itself is a very underrated management tool. I've seen plenty of business plans that were strictly done as an exercise with no thought behind them. Meanwhile, I know plenty of business owners with no formal plan, but with an excellent planning process.

I document my business planning with a web-based tool, but I do not have a formal business plan document. I do not need a formal business plan, but I absolutely need a good planning process to focus my business idea and plan my major expenses. I am then able to compare what really happened to my planning and make changes. Without this process, I would not know what to change.

University courses must teach students how to develop a good planning process, including the thought processes needed to evaluate a business concept. However, boiling a class down to creating a document is a short-sighted way to teach business planning.

By: Olli

Olli — Sun, 07 Mar 2010 22:03:56 +0000

When it comes to the financial side of a business plan, it provides the first acid test. Despite the fact that there is nothing sure or certain about anything in the future, it is highly valuable to create a set of scenarios to provide guidelines. By doing that before jumping into the cold water it might be a bit easier to see the alarming signals when the occur.

All in all, the role of biz plan should be questioned. One should carefully select the parts of it which help to challenge one's thinking and ideas in order to further develop them. It would have been nice to hear your presentation, my ideas and comments are only based on the initial blog post and my own still rather minimal “experience”.

By: karrisaarinen

karrisaarinen — Sun, 07 Mar 2010 21:39:54 +0000

Yeah, that's true. Planning is useful, but generally plans not so much. "No plan survives the battle."

I think more appropriate term or activity would be business design or designing a business. Like you can design products, you could design businesses. How this differs is that designs are useful, something you can work with and you formulate them from things you know and can control.

You wouldn't make product plans, stating like "During this year I will create a great product that everyone will love, it's going to cost me $100 to do, it will be blue since all the competitions are blue, and I will sell 1M units of them to SMB." Or an architect, instead of designing the building would just what he wants to will do a floating building rather of making the hard work actually designing one. Instead of writing some plan, you design and think a bit how you make things work in your business.

I made the mistake not to mention any other appropriate tools, like for example the Business Model Canvas(http://www.youtube.com/watch?v=A7CNobPt4lQ & http://www.businessmodelgeneration.com/).

To a business plan it has some advantages like 1) it will take you few minutes to few hours (not weeks to months) 2) because of that you can do it every week or month (not have to update some monolithic document or face it's becoming outdated) 3) you can do it collaboratively with other people (which is really hard with a business plan)

By: Olli

Olli — Sun, 07 Mar 2010 17:47:29 +0000

You have mentioned several good points in your post. As I also see it, the most valuable aspect of making a business plan is forcing yourself to consciously consider some of the forces affecting your business and acknowledging them. Most likely one's not able to fully analyse these factors, but at least being aware of them is as valuable. I'd say that this might apply well to new startups who have none or only little experience in running business.