Tag Archives: business plan myths

Business Plan Yes, Comprehensive and Detailed, Not So Much

Business Mistakes, Business Planning, , ,

Funny how sometimes what sounds like good advice isn’t. I was browsing online when I caught the alleged business plan tip shown here (although I added the red circle over it). It says you should write a “comprehensive, detailed business plan.” And I say probably not; only in special circumstances. 

business plan tip, business plan, agile and flexible

Instead, develop a streamlined, flexible, agile, lean, just-big-enough business plan and use it as the start of a forever-after business plan process. 

Set a schedule to review it and revise it at least once a month. Understand that it gets obsolete in weeks. 

Keep it on your computer where you can refer to it easily and keep it up to date. 

Focus on metrics, accountability, priorities, strategy, without a lot of text. For example, don’t ever write text describing your company or management team in a plan that won’t be read by anybody outside your company or your management team. That’s a waste of time. 

Of course you should know your business, your team, your strengths and weaknesses, and your market. That’s absolutely essential. But do you take the business time to describe it in comprehensive detail, with edited text, statistics and formal research? No. Not unless you have to communicate it to outsiders. If you’re jumping through hoops for a bank or investors, then maybe there’s an underlying business value to the extra description. 

But this kind of hype about big scary masters-thesis-weight business plans does a disservice to all the real business people out there who could use business planning to manage their business better — set priorities, develop accountability, move forward strategically — who unfortunately put off planning because of the mythology of the big formal document that feels as inviting as a high-school term paper. 

It’s business: Form follows function. If you don’t know why you need a comprehensive, detailed business plan document then you probably don’t. But don’t let that off-putting tippery keep you from using business planning to manage your business better. 

(Note: I posted this on Huffington Post this morning)

The “Sticking to the Plan” Problem

Business Planning

First mistake: sticking to a plan just because you think sticking to a plan is a good thing. Why? When sticking to the plan is like running into a brick wall, get a ladder.

  • When you travel, and weather interferes, flights get cancelled, hotels are worse than hoped, do you stick to the travel plan?
  • On the playing field, when the game goes off in a different direction, and surprises you, do you stick to the game plan?
  • Why then do you assume you’re going to stick to a business plan?

Second mistake: not planning because you aren’t going to stick to the plan anyway. Would you not plan the trip because flights might change? Or the game because the opponents might surprise you? Not hardly.

It’s a business plan, not a straight jacket. It doesn’t narrow your options; it makes them easier to manage. Having the plan gives you a sense of strategy, priorities, long-term goals, steps along the way, responsibilities, interdependencies, metrics, tasks, and resources.

It helps you manage change. So when things change – and of course they will – that’s not more of a problem when you have a plan; the plan connects the dots so you can move things around more quickly.

Sticking to the plan is good when it’s reviewed, and thought through. Consistency is good most of the time. There are two dangers, however:

  1. It’s bad to stick to a plan that was based on assumptions that have since changed. It happens far too often.
  2. The idea that having a plan means being locked in, forced to stick to it, confuses the daylights out of people. They start to argue against having a plan because of it. As if having a plan doesn’t help you navigate better when there are changes. As if having a plan reduces your freedom to change course, which is simply not true.

That’s all I’m saying.