Thursday, February 21, 2008

Do You Really Need a Business Plan?

Kelly Spors wrote in the Sunday Wall Street Journal (syndicated to The Stamford Advocate) that you really don't need the 100-page start-up plan. Ironically, I couldn't agree with her more. Here I am, a business plan writer, agreeing that you don't need a big plan. The focus is on the word, big.

Ms. Spors doesn't say that you don't need a plan. Rather, she says that you shouldn't spend too much time writing a huge plan. As Ms. Spors's small business column points out, entrepreneurs need to put their time into getting going. They need to create prototypes and figure out if they can manufacture a product or deliver the service at a profit. If they spend too much time planning, they can lose their window of opportunity.

At the same time, she says that you need to do some planning, as the planning process makes you think through your business model. She also allows that the time you do need a written plan is when you're going to be pitching to investors. Still, you really need to spend most of the time crystalizing your idea, getting your management team in place and figuring out your costs and burn rate so that you know how much money to ask for. If you've gone through the planning process, you then have a roadmap -- Ms. Spors calls it a compass -- which can help you dodge roadblocks, while you head toward your goal. That's why when I work with clients, I usually write an executive summary which covers all the key topics investors ask about, plus financial projections with documentation of key assumptions. I have never crafted a 100 page plan, and have not written a 25-page plan since 2002. Yet, I have clients who have launched successful businesses and raised millions of dollars. The ones who accomplished these things used their brief plans as guides as they focused on executing.

To read all of the WSJ article, "The 100-Page Start-Up Plan -- Don't Bother", see my sidebar under shared items. If you want to explore your own business plan, please visit my website: www.upstartbusinessplanning.com or email me at: upstartwyn@gmail.com.
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