In theory, a traditional business plan is the first thing entrepreneurs need before starting a business. Entrepreneurs are too spend countless hours cranking out a long document outlining each detail for how they will ensure success from start through the first 5 years of business. Financial forecasts, marketing strategies, and long term goals are to be well defined even before the first customer walks through the door. As an entrepreneur and owner of two businesses, I have a few issues with the idea that all of this is needed to start a business.
First, traditional business plans can hold a business hostage for 3 – 5 years. I launched my second company seven months ago and have already had to refine my services. As soon as I scaled down, I saw an increase in business inquiries and in conversions. If I had a traditional business plan and had to wait until it was time to update it, I would have missed out on opportunities. Instead, I referred to the 2-page business plan I created when I first launched my business. My 2-page plan is easy to read and includes specific, measurable, realistic short term (12 months) business goals. Every month, I review to make sure I am meeting and working towards the short term goals I’ve set.
Takeaway #1: Create a plan that is focused on realistic short term goals that you can refer to quickly as a reference.
Next, projections for financials and overall business success are two things that are required in a traditional business plan. Every entrepreneur intends to have a successful business but the reality is business success is not guaranteed. What you will know about your business is what will be in front of you – current customers, what you are bringing in, what’s going out, etc. Take what you know (and learn) and track that information in any format that works for you. This will provide the business with up to day information on the overall health of the business.
Takeaway #2: Track the health of the business regularly so you know if the business is on the path to success or failure.
Traditional business plans don’t allow for innovation or flexibility and being tied to or overly committed to such a plan can stifle change that may be needed for your business to grow and be successful. With the heavy influence of technology in almost every industry, change is inevitable. A business should always have room to accommodate a change or two especially a business that’s proving a service.
Takeaway #3: Don’t get so attached to the plan that there is no room for movement.
All entrepreneurs should have a plan but, it doesn’t have to be long and complicated. Instead, create a plan that is simple and flexible. Commit to reviewing the plan regularly to make sure your on track with the business goals and make adjustments as needed.