Do You Really Need a Business Plan?
It is very common for new entrepreneurs and startup founders to make a business plan. Most of the entrepreneurs consider the business plan to be the first step in starting their new venture. Even in business schools, the students are stressed to focus on the importance of making a detailed and well-made business plan as it is the key to getting a new venture started off in the right way. It is perhaps the norm to make a proper business plan first and then proceed towards the creation of the business. But the question that a lot of people ask is: are business plans really worth it?
Well, if we consider every aspect of what a business plan and what it offers to those who read it. When we look at it in every regard, the answer is that business plans are not truly beneficial and there is a solid argument for not making a business plan. In this post, we are going to discuss the reasons why it is not wise to make a business plan.
What is a business plan?
In very simple and brief words, a business plan is a formal written document that contains all the goals of the business, the methods and procedures on how the goals can be achieved, the time within which the goals need to be achieved, and other major information about a new venture.
Why do people make a business plan?
This is an important question. Why do people really make business plans when they have an idea for starting a business venture? Well, the brief answer to this question is that the entrepreneurs and the startup founders are looking for investors that can fund their venture. So, the major reason for a business plan is raising the funds.
Another reason why entrepreneurs seek to make a business plan is that it is a belief among the entrepreneurs that a business plan can help the business operate in an effective and efficient manner when they have the well-detailed outlines and guidelines to follow for achieving the goals of the venture.
What are the contents of a business plan?
The following are the major components of a business plan:
- Executive summary.
- Industry overview.
- Market analysis.
- Competition analysis.
- Sales plan.
- Marketing plan.
- Management and operating plan.
All these components make up a business plan and tell the investors and other people about what the business is all about and how it is going to work.
Argument For Not Making A Business Plan
There are so many businesses that achieved a lot of success without creating a business plan. This only means that a business plan is in fact, not necessary for a business. So, the following are the major reasons why people should not make a business plan when they want to start a new venture.
1. A business plan does not ensure funding
Most entrepreneurs believe that in order to raise money for their venture, it is important to write a business plan. But, the reality is that I’ve never heard of an entrepreneur raising sufficient finances by writing an impressive business plan. I know a lot of entrepreneurs who had amazing ideas for a venture and then later on succeeded to build a solid business. But when analyzing the reasons for how they were able to achieve success, a business plan was not one of the reasons.
The point is that investors are not interested in reading business plans. They are not interested in investing in ideas. What they are interested in is investing in a business that has potential and can be built and run quickly. Investors want to see more than the pieces of paper that make up a business plan. So, a business plan is not the way to raise money/funding for your venture. Therefore, it might not be wise to spend a lot of time on creating business plans that nobody is interested in reading.
2. Business plans are not reliable
Business plans try to predict the future. They try to explain how the business will look like at a certain point in future if it follows the methods and procedures that are also mentioned in the business plan. But unfortunately, the truth is that the business plans cannot predict the changes that take place in the business world on a day to day basis and therefore the predictions for how the business will perform are not reliable at all.
A business plan might say one thing but when the business is actually started and participates in the marketplace, there will be a lot of changes taking place in the market on a regular basis, that can completely alter the plans of the business and hence the procedures of the business plan will prove to be futile. This indicates that creating a business plan might be very futile as it cannot predict the future and cannot clearly state the things that might take place in the marketplace.
3. Businesses change their directions
When creating a business plan, the entrepreneurs have very limited ideas about what is possible and what they can actually achieve in the market. But once they actually step into the market and start seeing how things actually work, they can realize a lot more things that they can achieve through their venture. This can make the businesses change their approach towards the goals completely and most of the time, even the goals of the businesses are changed completely once they see the potential to do and achieve even more. So, this also proves that creating a business plan is only futile and not beneficial at all in any manner.
4. Time is wasted
Another important reason why it is not wise to create a business plan is that a lot of time and resources are wasted in trying to create a solid business plan. The entrepreneurs and the startup founders can use this time and the resources to focus on the things that actually matter in making the business become a success in the market but unfortunately as people believe that a business plan matters a lot, they waste a lot of time and resources in creating a business plan that won’t do any good to their business at all. Therefore, do not waste any time or resources in creating a business plan that won’t do any good.
5. Business plans limit thinking
Another disadvantage of creating a business plan is that they can make the thinking of the entrepreneurs and startup founders become very limited and narrow as they focus on only what they have available to them in the form of methods and procedures in the business plan. This can make their mindsets become limited and this prevents them from discovering new possibilities and methods for making their business become a success. A narrow-minded approach towards a venture is very bad and not beneficial at all. So, this is another major reason why businesses should not create a business plan.
6. False assumptions in the business plans
Another major disadvantage of creating a business plan is that business plans most often have unrealistic and false assumptions about the future of the business and the overall conditions of the market in which the venture will operate. These false assumptions always lead to disappointments when things don’t work as they were supposed to and this leads to a decrease in productivity levels of the members of the venture when they fail to perform as they had assumed. So, this is another reason why making a business plan is not a wise step and isn’t beneficial at all.
7. Long periods of planning result in a lack of experience
When entrepreneurs and startup founders are focusing a lot on creating the best business plan, they take very long periods of time to work on the business plan. They spend way too much time on creating a business plan that will benefit their venture. But the problem is that the more time that is spent on creating a business plan, the more opportunities the entrepreneurs miss because this time could’ve been spent in actually operating in the market and gaining new experiences and seeking opportunities. So, do not waste any time in creating a business plan but rather use the time to actually operate in the market and see how things work.
Fitness trainers and business plans
Personal fitness trainers and wellness coaches do not need to prepare any business plans either. The fitness trainers and wellness coaches should focus on the creation of the venture instead of focusing on making a business plan that will not offer them any advantages or benefits in any manner. The fitness and wellness entrepreneurs should focus all their energy and resources on the creation of their venture and try to make it work as successfully as possible.
Steps to Starting a Training or Coaching Business
It is evident that creating a business plan is nothing but a waste of time. It is futile for the entrepreneurs and startup founders to focus their energy and their precious time on something that does not offer any benefits to the business. The entrepreneurs and startup founders should do their best to focus on how they are actually going to build the business.
In terms of the investors, it is proven that raising funds it not dependent on how the business plan of a venture is, and therefore the people should not worry about missing out on funding opportunities by not creating a business plan. A business plan does not mean that the investors will surely fund the venture. The investors are mostly not even interested in reading business plans. So, raising funds has no dependence on the business plans and therefore business plans are futile in this regard as well.
All of this proves that indeed business plans are not helpful in any regard and people should stop focusing on them so much. The success of a business depends on how well the entrepreneurs execute it and how well they handle the stresses of the market.
So, business plans aren’t as essential as people believe them to be and they do not provide any benefits but rather they waste precious time and resources of the entrepreneurs and startup founders.
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