Business Plans are Dinosaurs? Ignore Them at Your Peril
Once a foundational principle and milestone in the launch of a new business, business plans have been criticized as dinosaurs and symbols of old and stale management practices. Just push forward and fix mistakes as they come up is often the wisdom imparted by entrepreneurial gurus. While it may be true that investing six months to create a thick document that could run hundreds of pages can cause an entrepreneur to miss a promising “market window”, the fact of the matter is that it is still true that no business should be started or operated without a clear plan of what it intends to do and how it intends to accomplish its goals. In fact, the business plan is a byproduct of a company’s larger strategic planning process which should be undertaken to assist management in articulating the main mission of the firm as well as the key objectives of the company’s productive activities, facilitate the formulation of short and long-term growth strategies, and develop and implement programs for enhancing operational efficiencies and reducing the waste of available manpower, capital and other scarce resources. A business plan transforms the company’s initial ideas into specific action plans for achieving its goals and monitoring the progress of the company toward its identified destination. The planning process will force the company to determine the specifications for the products and services it intends to sell, how those products and services will be marketed, how the business will be financed and managed and what human resources will be required in order to make the company’s strategic initiatives successful. A well written and carefully researched business plan may also serve as a useful report card that allows managers to compare what actually happens to what was predicted at the time the plan was first written.
The International Center for Growth-Oriented Entrepreneurship has just released a chapter on "Business Plan Preparation" from its Library of Resources for Growth-Oriented Entrepreneurs on Strategic Planning which is available for free downloading and sharing by clicking here. Also, take a look at the Center's article on LinkedIn Pulse discussing important things you need to know about preparing and implementing an effective business plan.