5 Reasons to Skip the Business Plan

When it comes to small business, I’m not a fan of written business plans. Here’s why:

  1. Writing a business plan is an incredibly laborious, time-consuming process that distracts you from the real work of building a business and no one—not even you—will ever read it.

  2. It’s outdated as soon as you finish it.

  3. It’s built on assumptions—which are of course unproven until you test them.

  4. It’s full of projections based on those assumptions—which are thus meaningless.

  5. Potential funders will ignore the projections—unless you’ve got proven traction already.

And to put the last nail in the coffin, in a study of more than 100 ventures, researchers concluded there was “no difference between the performance of new businesses launched with or without a written business plan.” A written plan becomes even more unreasonable when there’s no indication that it provides any real benefit to business performance.

Photo licensed and adapted from tallahassee

Photo licensed and adapted from tallahassee

“In preparing for battle I have always found that plans are useless, but planning is indispensable.” ― Dwight D. Eisenhower

If you need external funding, you’ll need something to make your case, however. Develop a pitch deck. If you’re going it alone on your own dime, skip the business plan and get down to business. How do you do that?

Strategize. Test. Iterate. This is sufficient for most small business owners.

Strategize – Determine what your goals are and how you will achieve them.

Test – Try out your strategies and notice how well they’re working. Look for opportunities to prove your strategies wrong so that you can fail fast and get on to the next, better solution ASAP.

Iterate – Adapt your strategies accordingly, and then get back to the real work of owning a business.

Remember, as LinkedIn founder Reid Hoffman said: “The entrepreneurial journey starts with jumping off a cliff and assembling an airplane on the way down.”

Enjoy the ride,
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