2 Reasons Why Business Plans Are A Waste Of Time
1. Mistakes are not Failures.
Every day, another local business crashes and burns in spectacular fashion.
Did they make a lot of mistakes?
I don’t think so. My theory is that they didn’t make anywhere near enough mistakes. See, at school, they trained you to believe that mistakes are bad. That mistakes reveal ineptitude. That mistakes are shameful.
But I believe that mistakes should be celebrated. To get good at anything that’s worth doing well, you have to make mistakes. And lots of them. I remember making hundreds of mistakes in the early days of my small business. I felt bad about them at the time, but looking back I can see that every one of my mistakes has served me well. They each revealed another way that did not work.
A fatal mistake, however, is an assumption. Why? Because an assumption is something that you just decide is true without doing any of the groundwork to prove it. Assumptions are very dangerous. In fact, assumptions are the reason why so many businesses in South Africa close before they reach anywhere near their full potential.
2. A Business Plan is just a set of Assumptions.
Fans of business plans always emphasize one thing: To Secure funding for your business, you almost always require a formal plan. But what about companies which are funded by friends and family? What about the notion of starting small and grow yourself up into success? Why would you wait for investors, commercial banks or government lending institutions to approve your business before you can start your dream? Unless you are just there trying to do any business and not trying to solve the customer problem, then indeed you will need a business plan.
The problem with a business plan, I do believe, it’s that it’s just a set of assumptions and they’re almost always wrong.
- You assume you’ll have a certain number of customers
- You assume they’ll pay you in full, on time
- You assume you’ll have talented, dedicated staff who will get things right instead of making expensive mistakes
- You assume you’ll be full of energy and enthusiasm, even when everyone else is telling you to stop, move on and find something new.
- You assume you’ll afford a luxurious office in a nice business complex park in 3 months time.
That’s a lot of assumptions, Tiger. And they all stem from the flimsy and immature premise that, come what may, a business plan will magically keep your company afloat in good times and bad.
Boy, are you in for a rude awakening.
True entrepreneurs know that a business plan is just paper…
It can’t guarantee you anything. It can’t save your bacon when things go bad. It can’t pay your rent. It can’t feed you when you’re hungry. It can’t motivate your people. It can’t get anyone to love your product. It can’t help you build a tribe of enthusiastic and loyal fans for your product. It can’t do any of the stuff that matters.
…So why are you spending so much time on it?