You don’t need a business plan. Just ask Craig Newmark. “We don’t have much in the way of a business strategy. Like no business plan… The deal is, it’s a mixture of luck and persistence.” Newmark’s little startup, Twitter, was founded, he claims, with “no vision whatsoever.” He likes to give the impression that it just grew up, like a kid with hippy parents, free to be who it wanted to be. I claim no psychic ability, but I know two things for certain: one, this won’t happen to you, and two, even Twitter realizes you need a viable business plan to survive.
As Twitter grew, its leaders realized that the hippy kid needed some parenting. Stuart Williams, an analyst at Technology Business Research, says,
Every business has different cultures, and their processes may lack maturity and experience. However, being in business means you want to make a profit, and every serious business wrestles with this problem every day. Announcing and delivering a well-considered business plan is one step toward being a serious company. Executing on the plan earns you respect
And that’s the bottom line for every company – or the ones that want to make money. So why do business owners and leaders avoid planning like it’s an extra serving of Brussels sprouts?
- They don’t understand the value. The thinking here is, “I’m good at building,” or, “I’m a good chiropractor. Why do I need a plan to tell me how to build a business around that? I do it; people give me money. How hard is that?” That’s just not how it works. Your business plan needs to address key areas of business operations.
- It’s too expensive, time-consuming, and/or difficult. Yes, it is all of these things, but first and foremost, it is an investment in the future of your enterprise. If you don’t have a plan, you are jeopardizing your business or putting yourself in a position in which you cannot fully realize opportunities.
- They’re not sure it’s going to help. Many see a business plan as just another document, something you need to slap together to satisfy the bankers. They don’t connect it with daily operations, but that’s exactly what needs to happen. You need a plan that details the direction and function of the business.
Twitter is projected to earn $260 million in revenue this year and $540 by 2014. Without a plan, it would still be a platform for talking about arts and technology events in San Francisco instead of a global social media powerhouse. Twitter got lucky in the first few years; then it got smart (and profitable) and started planning. The vast majority of businesses will not get that learning curve. Starting with a plan is essential.
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