Please, people, don’t get misdirected on this. The business planning is there for the company, as in the founders, the entrepreneurs, the people who are building and running the company. It isn’t a document, it’s a process, which begins with a document and continues forever with a live planning process involving frequent course corrections. It isn’t just for investors (or bankers) to read, and it doesn’t matter whether anybody else reads it.
Are you kidding? Do you think any successful business gets there without planning? Don’t confuse the plan with the planning. One of the investors actually cites the Eisenhower quote I use a lot, “plans are useless, but planning is essential,” although he credits Napoleon (and maybe Eisenhower got it from him).
This comes up again — and I apologize because I’ve written it a lot lately — because I really enjoyed reviewing the Angel Capital Panel discussion on the new Industry Standard site moderated by Guy Kawasaki and including three of the all-time hall-of-fame angel investors in Silicon Valley. It’s an online video at the Standard site, which I found thanks to Guy posting it on his site. The talk about how these investors look at deals is fascinating. The talk about the early days of Google is classic. This is our industry history.
There’s an underlying theme that reminds me of Malcolm Gladwell’s book Blink (there’s a link to it below to the right in my book recommendations) about how quickly people make important decisions. These investors say they know in 30 seconds whether they like a deal. They say they want more information, not less. Guy suggests that it’s “hot-or-not” rather than “eHarmony.” No wonder he’s in such demand, that’s a great summary.
But don’t get fooled about business planning. Too many of our opinion-leader experts are trapped in a now-obsolete conception of the business plan as an old-fashioned ponderous document that they hated doing, when they did it. So now they want to save you from the pain. What they don’t get is that business planning, done right, is not painful. And it’s not for anybody else. Like life planning, you do it for yourself.