Are business plans really evil?
Filed in archive Bootstrapper Tips by Shawn Hessinger on March 14, 2007

Most people go out and buy or download business plan templates. There are millions of them out there. They all claim to be tried and tested. The only problem is that they are very time consuming and will never reflect a dynamic growing business.
Here are a few added thoughts:
1. Business plans just aren't realistic. As bootstrap entrepreneur and guru Greg Gianforte observes:
Bootstrappers don't write lengthy business plans, chase deep-pocketed investors, or indulge in overly academic market research exercises. Instead, they focus all of their considerable energy, brainpower, determination and skills on creating a business that can actually succeed in the real world.
2. Earning projections are another way of saying wild guess. Here are some of my real life experiences with projecting income.
3. Customers will define your market, not a couple hundred pages you typed up before you even met a customer. Guy Kawasaki explains the problem:
You might try to position your product in a certain way, but ultimately customers, not you, position your product. You take your best shot and then you see how customers react--if, frankly, they react at all. But, at the end of the day, you're hardly in total control of positioning.
You can imagine what happens to the entrepreneur who pins his hopes to a marketing model based on selling lemonade
only to discover customers are more interested in collecting the decorative glasses it is served in. 4. You can leave that business plan for later. When entrepreneur Shelli Styles
launched her line of fair trade beaded bra straps marketed to aide her husband's South American relatives she and her small volunteer sales force were much too busy getting their product into stores and testing customer response to worry about creating a business plan. She figures she'll just hire someone to type one up if she ever needs outside financing.
So, if not a business plan as a guide in creating that next venture, then what? Well, in The Art of The Start, Guy Kawasaki suggests a good business plan should be no more than a detailed version of a 20 minute sales pitch.
Braendgaard suggests a more free flow document which can be added to by contributors perhaps as part of an online collaboration.
And perhaps the most intriguing view is the one suggested by Feedburner CEO Dick Costolo of blog as business plan outlined here.
But I've come to believe an even better method of guiding entrepreneurs and their team through the early days of start-up may exist to replace the long winded and often much too inflexible business plan.
More on this in the next post.
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