Earlier this week, I ran into a friend who just spent 4 weeks writing a business plan. I was instantly reminded of my ex-girlfriend. I remember her stubbornly attempting to put on her skinny jeans -- after she had put on her sneakers. Eventually, she found success — but then had a change of heart. She decided to wear a skirt & high heels instead. *facepalm*
1) Business Plans - Putting on your sneakers before your skinny jeans
This is most likely going to happen to you with your ‘business plan’. You’ll struggle for weeks, maybe months. You’ll feel good about yourself and then realize that the core components of your “plan” need major changes. So now you have two choices:
- Go ahead with the plan anyway because you spent so much time on it.
- Scratch the plan and change paths for the better
With the first alternative you’re falling victim to “Sunk Cost” fallacy. You’re much better off with the second alternative, but you’ll realize that you wasted a lot of time and feel shitty about yourself.
2) You need a Business Model not a Business Plan
The odds are already stacked against us. Most startups fail. Of those who do succeed, 66% have reported that they changed their business plans drastically. Writing a 50 page document and expecting to adhere to the plan for years is an exercise of fantasy.
What you need is a quick ‘model’ that succinctly captures how your core components tie together. In one of my previous posts, I discuss the Business Model Canvas — which lets us put together a model in 10 minutes. Moreover, it gives us a bird's eye view of our entire model in one page. Extremely handy!
3) It delays ACTION and perpetuates ‘Analysis-Paralysis’
Analysis Paralysis — A plague that has afflicted most of us at some point or the other. We’ll overanalyze and deliberate in an attempt to make the “perfect decision”. In the process we make no decision (or take no action).
Writing a 50 page business plan is no easy feat. But the truth is, it does nothing to move the needle. Many of my friends write their business model, and then do nothing to execute. Why? Because the completion of a 50 page document drives a false sense of accomplishment.
If you’re not a year or so into your venture already, you most likely don’t need a Business Plan yet.