So you’ve finished that business plan. You’ve presented it to investors, to bankers, or for review from somebody else. It worked for you, got you into the door, won you some respect and serious interest.
Congratulations. That’s a good feeling. But your plan is still wrong.
Don’t feel bad about it. All business plans are wrong. That’s because they’re done by humans, and they predict the future, and humans aren’t good at predicting the future.
They are still vital to a good business. They set down what you think should happen, when, and how much it costs. Even though they’re wrong, they track priorities, and relationships, and the interdependence of different parts of the business.
And now, after they’ve been presented and reviewed, the business plan contests finished, the winners awarded, the angel investment determined, what should become of these business plan documents? You have three choices:
- Store them and preserve them like museum pieces. Somebody can dig them up later and laugh at how wrong they were.
- Execute them. That sounds good, I suppose, because execution is so valuable. But the problem is that they’re wrong, and as time passes, more wrong every day. So what’s the value in sticking to a plan? Does it make sense to do 10 months from now what you thought would be the best thing when you were guessing about it three months ago? Plans that are just mindlessly executed aren’t likely to hold up for very long.
- Boil them down to their essence, the concrete measurable milestones, projections, and deliverables. Forget the flowing summaries for outsiders. And from now on, at least once a month, compare the actual results to the planned results, review that, revise the plan when assumptions change, evaluate results, and make changes. Make the planning process part of management.
Which do you think makes the most sense? I like option 3, which shows how planning is management, controlling your business destiny.
4 thoughts on “Real-World Message to Entrepreneurs About Their Business Plans”
Great post Tim and impeccable timing. My undergraduate New Venture Creation class just presented their business plans to a panel of judges last night. It was great fun and you have succinctly provided me with excellent content for my end of semester email. (I may even put this, with proper attribution, into my syllabus).
Yes, option three is the best. That line of thinking was driven home by one of our judges last night. Option one (or maybe 0) is what happens — they are stored on hard drives and forgotten — not really preserved like museum pieces.
Hope all is well. BTW, Any movement with the book idea we discussed a few months back?
I’ll take #1. My first Business Plan was so off base it’s laughable. I really couldn’t have done a worse job of estimating revenue if I had thrown a dart against a wall with dollar figures on it. With experience, my Business Plans have become more realistic and now they actually help me focus on what needs to be accomplished.
Yes, #3 – being in control and steering your business in the right direction is critical to making progress!
If the career you have chosen has some unexpected inconvenience, console yourself by reflecting that no career is without them.
I was told to avoid the business all together because of the rejection. People would say to me, ‘Don’t you want to have a normal job and a normal family?’ I guess that would be good advice for some people, but I wanted to act.
You must log in to post a comment.