Have you ever been told that you must have a business plan to start a business? This is one of the most common pieces of advice that entrepreneurs hear; but, whether the advice is necessary is up for some debate. There are some instances when a business plan is a must-have and there are some instances when one is not needed at all. However, some form of planning does help most entrepreneurs get their businesses off of the ground.
Most experts agree that entrepreneurs who need to secure funding must have business plans. These plans need to be filled with formality regarding the feasibility of the business. So, accurate numbers are important. But, businesses that are relying on family members for funding (or not looking for funding at all) can use anything from a plan on the back of a bar napkin to a formal plan. It all depends on the request of your investors. The two things that most people agree on is that the business plan need not be overwhelming in length and that is includes actionable steps that lead to success.
Sales over planning
Adrian Miller of Adrian Miller Sales Training did not need a formal business plan to start her business because she was not in need of financing. Her belief is that entrepreneurs need “customers, because without them you can put your plan in the trash.” She values target-market knowledge, so startups understand how to market to them to get going and get sales.
Overrated, but critical
Despite Miller’s success without using a formal business plan, Zev Asch, the president of Ledaza Inc, thinks differently. His digital marketing company deals with the business plan controversy on a regular basis. This emotional topic is all about mindset. Asch said: “The best part of writing a BP is the process and the deep thinking that are required.” He advises his clients to write their plans not to convince someone to finance your business. He advises them to write their plans with the intention of creating a successful business and to share it with experts to get their advice, too.
Asch recommends all entrepreneurs develop plans for their start ups. “If it’s not written, it won’t happen,” he said. Asch sees newbies waste their time finding business plan templates and diving into details. He advises, “You need a roadmap for how you are going to get customers — plain and simple. It can be on a napkin – the hard work is getting customers not writing the plan.” Since businesses cannot survive without “numbers,” it is vital to have some simple financials, especially when it comes to marketing. “Remember, ‘free’ marketing doesn’t work, but hard work pays off.” And, for Asch, hard work involves using the phone.
Stop wasting time and get started
Patti Pokorchak of Small Biz Sales Coach agrees with Asch, especially regarding the amount of time that entrepreneurs waste while planning. She said: “I’m the opposite – massive action as you don’t know if you are going in the right direction UNTIL you take that first step.” Pokorchak has an MBA and she has started 11 businesses over the course of 26 years. Once you take the first step, then you can decide what to do next. She does create plans, but they are limited to annual financial goals that are then tracked monthly. She then adjusts her tactical and strategic plans as needed.
One size does not fit all
The trend in business plans seems to be that one size does not fit all. Take Cat LeBlanc, who shared her story on Business Insider. She agrees that entrepreneurs who need funding absolutely need a formal business plan. To start her coaching business, she created her own style of planning she calls “concept to test.” She uses these four elements: the idea, the value to clients, an offer, and minimal test marketing. She wanted to see if her business idea would work and she did it in the way that Pokorchak recommends, by getting busy actually doing, rather than planning. And, for LeBlanc, it worked.
Ramon Ray says that while a formal business plan is not necessary, every entrepreneur should have a plan – of sorts. Even if it’s on the back of a napkin, as Adrian Miller said in a follow up comment.
Authored by: Kristen Bentley, Reporter, SmallBizTechnology.com