When I meet with prospective students and tell them about all of the cool features of our program, they inevitably ask me one question: “OK, but are you going to teach me how to write a business plan?”
We set business plans up on a pedestal as if it is the holy grail of entrepreneurship. Just look at BusinessWeek.com’s most recent special issue on entrepreneurship — it is all about business planning. The articles in this special edition include:
“The Right Business Plan for the Job”
“Before You Write a Business Plan ”
“Slide Show: The Best Business Plan Tools”
“Video: What the Business Plan Expert Knows ”
“How to Write a Winning Business Plan”
“Building a Better Business Plan ”
“How to Win a B-School Competition”
It is as if we are telling aspiring entrepreneurs that once they unlock the secrets of the business plan, the world of entrepreneurial wealth will come pouring out at them.
Sorry, but this is just not true.
On the other hand, there is now a debate raging as to whether we should even teach entrepreneurs about business plans. a growing number of experts now fundamentally question whether business plans even matter. It seems that some data suggests that business plans have no impact on the overall success of entrepreneurial ventures.
All of this — and I mean both sides of this debate — is missing the point.
Are business plans all you need to know to unlock the door to success? Of course not.
Is writing a business plan a complete waste of time? Also, not true.
So why do we teach about business plans? It is because they are a way to help organize what can be a complex and overwhelming array of issues. It is because it forces us to integrate our marketing plans, or operating plans and our financial plans into one, coherent story. It is because we need to put it all down on paper to make sure that we have thought of all of the important stuff that goes into a successful start-up. It is because business plans have become the standard for communicating about a business to those with money.
Will a formal business plan make you richer and more successful? Probably not. I know many entrepreneurs who never wrote a formal business plan for their ventures who have made a lot of money. But they all understood the importance of business planning. They just never took the final step of writing it down. While the business plan itself may not always be necessary, effective business planning always is.
Understand that the business plan is just a map. It is a map into an unknown territory. Our actual path in our business will likely look very different than our plan. But the plan got us thinking. It made us think about all the details. It helped us understand how all of the parts of a business fit together to make a whole venture. It helps prepare us for our journey and makes us better prepared to adjust to all of the surprises that we will face almost every day we’re in business.
Success will not be determined by the plan. Success comes from implementation.
On every golf hole I always start with a plan of how I should play the hole. Then I actually hit my shot. The wind may change direction. the ball might take an unexpectedly bad hop on the ground. Or — and this is most likely — I just don’t hit the ball the way I had planned and hoped. So the way I actually play the hole changes with the reality of each shot based on my execution and based on the uncontrollable events that are a part of any activity — be it golf or be it building a business.
But I still plan. I just know that I will have to adjust my plan each step along the way as I begin to implement it as I start and grow my business.
