Almost every “start your own business” guide out there seems to have one piece of advice in common: you MUST have a business plan. In order to grow a successful business, they say, you need to have every aspect planned before you start. While I agree that this may be true for someone who will be launching a full-scale small business that they will rely on as their sole income, but for those of us starting a business part time on the side, a business plan is a waste of time. Before you start writing a nasty comment telling me I’m doomed to failure for not properly planning my business, let me present my case.
Drinking the Coolaid
I bought into the whole business plan thing about a year ago, when I decided to get serious about starting my pc repair and consulting business. Before I did anything, I spent a few months just browsing the internet, looking for advice and resources for starting a small business. Needless to say, there is a lot of information out there, but one of the common threads I would keep reading about was the business plan. I thought that would be the perfect place to start, so I began downloading sample business plans and guides on how to start a business plan.
I soon learned my first lesson on the road to business plan burn-out: There’s not a one-size fits all business plan out there. Every business plan I read and every outline I downloaded didn’t quite fit the business I was looking to start. A business plan is a very personal document that will be tailored to your specific niche and situation.
I ended up using the shell of a business plan I found somewhere online and began trying to fill out the different sections. I soon came to realize that each section of the business plan required some sort of extra knowledge or insight that I didn’t have, like laying out a marketing strategy, outlining my operating procedures, doing a break even analysis, and drawing up a three year earnings summary.
I was only able to fill out a whopping 3 sections of the business plan: the Statement of Purpose, Description of Business, and Analysis of Competition. These are basic things that I think are definitely important to outline, but in no way require a formal business plan.
Blog-o-Sphere to the Rescue!
About 6 months later, after having some set backs and becoming frustrated with the seemingly endless amount of preparation involved in starting a business, I decided to start this blog. That was probably the SINGLE most helpful planning step I made. Through writing this blog I was able to formulate a plan for my business and see it through with the accountability of hundreds of Internet readers. I was able to figure out that I was going to start my business as a part time venture using a test-drive approach. I met and became friends with other small business owners and computer consultants who have their own business and in talking with them, one thing became painfully obvious.
Not one of them had started their business with a formal business plan.
That’s when I realized, business plans are useless for entrepreneurs in my situation. Business plans ask us to make predictions and estimates based on information that we as part-time start-ups don’t have the experience to know or the time to find out. Business plans are things that people waste their time doing when they should be getting out there and doing business.
Instead, I say the business plan is something you should develop from the trenches. It should be a work-in progress that you slowly develop over time, as you run your business.
A business plan is necessary only for those businesses that need investors, partners, or will be hiring employees. A business plan is not necessary for starting a business part-time using your own funding. this kind of business isn’t burdened by the necessity to produce results right away, so it has the time and opportunity to learn from its mistakes and develop a strategy based on those mistakes.
Don’t get me wrong, I think some amount of planning and foresight is crucial in order to get a part time business off the ground, but a formal plan can easily get you caught up in unnecessary details.
So in my next post I plan on introducing you to the “anti-business plan”. It’s actually not a plan at all, but a series of guiding principals and questions you should ask yourself before you start your business. It’s a light-weight and easily digestible strategy to get a part time business started quickly, and on the right foot. It’s something I developed after months of frustration trying to fruitlessly develop an unnecessary formal business plan for my part time computer business.
How do you feel about formal business plans? Do you think they are necessary in all cases?