This blog isn’t about business plans.

It’s about the way businesses develop, I mean really develop.  This blog is about the way that businesses go from idea, to independent being.  Unfortunately for most, the business plan has much less to do with that process than previously believed.  Let me start from the beginning.

You have an idea.  It’s the best.  This idea will revolutionize whatever industry youre in.  More likely, this idea will free you from the shackles of whatever job you’re in right now.

What's the big idea? Oh, it's you.....

So you stroll down to the bank (that’s where they keep the money) and tell your nearest personal banker all about your idea with the excitement of a child on a winter holiday morning.

“Where’s your business plan?”

Now this can go one of two ways from here, either you don’t have a plan at all, in which the bank is completely right to tell you to go and do some more research.

But this blog isn’t about business plans

The problem with this scenario is the emphasis on creating a static plan, which is a single event; and going through the process of planning.  We’ve been lucky enough to start companies using a plan scrawled out on a white board then snapped on a digital camera and printed out.  I’ve also sat down and written “standard” business plans, and i’ve come to the same conclusion.

Both plans are as worthless as the paper they’re printed on.

From the time you have a business idea, to the time your doors open, your plan will have changed so many times that the document you spent so much time crafting is now primed for either the recycling bin, or paperweight status.

So why do we spend so much time on business plans?

I don’t know.  I don’t, things change.  My belief is that you need to be able to change at whatever speed your business gets new information at.  If your business changes daily, then your plan could, in theory change daily, if it’s hourly, then so be it.  Understand the real value in creating a business plan in the first place.

Get an initial idea of what you would do, if all of your assumptions are correct.

Did you get to the second half of the statement?  That’s what this blog is really about.  What new business owners fail to realize is that all they’re doing is making a list of things they would do if their intel is on the money.  Can you guess how often that works out?

Not too often.

I’ve been doing this for a few years now, and your assumptions will always be right sometimes, and wrong at others.  The key to success isn’t in writing a document outlining your plan of action in case all of these go as planned, the key is to recognize when you’ve assumed wrong quickly, and adjust quickly into a new strategy.

So why do we spend so much time writing business plans?

It looked like a good idea on paper...

That’s how you get the money.  So they say.  Most new entrepreneurs write business plans for cash, either a loan from a bank, or an investment from an Angel, or VC.  But unintentionally, these individuals are pushing a larger problem.

If you write a plan to get capital, your focus turns to the money.  You add things that should impress whoever gives the money.  Add things for stability, add things for favor.  Instead, your first business plan should be completely focused on creating a system that can run without you being involved in the technical aspect of running the business as soon as possible.  How fast can we prove that this works?  When we do that, how are we going to build training manuals to hire people to replace us so we can work as mangers?  After that, how are we going to systematize management decisions so that we can hire managers and take on executive roles?

Not too sexy huh?  Well welcome to the not so sexy part of business.  To be really good at it, you have to be an expert at “translating to toddler”.  Can you make your processes so simple that a child can understand what you do?  If so, you can hire, you can train, and you can grow.

Business plans focused on getting cash don’t do that.  They talk about forecasts, and executive summaries.  They make bankers smile.  They get you checks.

Unfortunately, that rarely works out…

The truth of the matter is, that as a pure startup company, you don’t really deserve a lump of cash.  You need to be focused on proving that your idea really works in the market.

Imagine that, prove you can do a job before you get paid…where have I heard of that before?

–ERY