An article in Inc.com tells a story about entrepreneur Craig Knouf who reportedly has revised his business plan more than 120 times. While this might seem a bit extreme (or as my student Joe called it, ?compulsive?), I think that it illustrates a critical function of business plans.
I would much rather see an entrepreneur make the business plan as a process, not an event. By continually tweaking, adjusting and improving his plan, this entrepreneur is making business planning an integral part of how he runs his business. Too often, the business plan is a document that once written, sits on a shelf gathering dust.
The business plan is best if it is a living document. In my businesses, there were many times when you couldn?t find a full and current copy of a business plan bound and sitting on my desk. But you could find all of the key elements at work with my partners and our staff, and alive in our meetings every week. It was evident throughout all of our business, but not to be found in a single place. That is how we brought our plan to life in our business. For Knouf it was to continuously improve the document and use it to guide his business. Either way, it makes the business plan an evolving part of an ever changing business venture.
This illustrates why I have always shied away from writing business plans as a consultant. The process of the development of the plan can be one of the most important tasks an entrepreneur performs. But it is the process, and not the outcome, of business planning that truly matters.