“If you just work on stuff that you like and you’re passionate about, you don’t have to have a master plan with how things will play out.” — Mark Zuckerberg, founder of Facebook
Every worthwhile venture requires good planning and starting a successful business is no exception. A business plan is generally considered an important first step towards starting a successful business. But is writing a long boring document that isn’t even based on facts really the best way to plan a business?
While writing a business plan may not be completely a bad idea — it surely has its merits — why waste precious time on an activity you can completely do without? A perfect business plan (if this is achievable) is no guarantee that you will build a successful business and this why you should reconsider investing any time into writing one.
The marketplace is different on paper
All your graphs and projections may look good on paper or a screen but, it’s a whole new ball game in reality. No matter how hard you plan and research you simply cannot predict the future. So a well-detailed plan based on an optimistic picture you created in your head may only be fit for the trash once you encounter something you did not see coming.
Many successful businesses deviated from their initial plan. Avon, for example, started out selling books from door to door but changed strategy when the founder realised women preferred free perfume samples to the book he was offering. An observation he wouldn’t have noticed on paper of course.
So is there any real sense in investing so much time into writing a plan you are likely going to change?
You should choose speed over perfection
“Just start. If you wait for things to be perfect, you’re never going to do anything because there’s never really going to be a perfect time. Done is better than perfect, so just do it.” – Modupe Macaulay, founder Capital Square
In a bid to get everything right from the start by coming up with the perfect plan, many entrepreneurs give themselves excuses to delay launching their business.
The only real way to plan how to run your business is to be in business. The longer you work on your business plan in a bid to perfect your idea, the longer you stay out of business and you will simply be deceiving yourself if you think you are making any progress. Tayo Oviosu, the CEO of Paga definitely understood this; he said this in an interview with Techpoint
“We never wrote a business plan for Paga until we were going out for our Series A in 2012 (they launched in 2009). By the time we wrote that business plan, we understood the business. So it was a more coherent document. If we had written this thing in the beginning, we’d assume we could do x and y. But the truth is we didn’t know what we were talking about”
You should also bear in mind that the market is continually changing, So while you are making fervid plans to launch the best “product X”, the market may have moved on to “product Y”. How can you spot this quickly when you are not even in the market and what becomes of all your plans?
If you ever take them seriously, business plans can be limiting
Typically a business plan should reflect your plans for a few years, however, sticking to a plan may not always be a good idea. A good plan you made a few years ago may not necessarily be good today because a lot of things must have changed.
So if you specified a path you expected your business to tow, you may be resistant to exploring new ideas or adapting to changes that may be beneficial to your business. Contrary to what you may think successful entrepreneurs are not always big planners. Listen to Jason Njoku:
“I don’t really have long-term plans. That’s why you would never get a business plan out of me. I’m like “whatever happens, happens. It is what it is, we keep on moving forward.” — Jason Njoku, founder of iROKO
Business plans do not guarantee funding
One of the common reasons why people write business plans is to raise funds, however, a business plan doesn’t even guarantee this. While it is true that many investors require formal business plans, you should also note that many investors do not invest in plans rather they invest in businesses that exist.
So rather than spending valuable time writing a business plan that may never be read in a bid to attract investors, why don’t you take Jason Njoku’s advice;
“If you are seeking initial funding, forget investors; get customers ”
A business plan is not a business
A business plan is like a map that leads to a desired destination. However, having a map doesn’t mean you have started your journey. It is not uncommon for entrepreneurs to throw in so much time and energy into creating the perfect plan that they soon begin to feel a false sense of accomplishment when they have actually achieved nothing.
Entrepreneurship isn’t exactly about planning the future, it is really about creating the future one step at a time. Many successful businesses today started without business plans including Google, Yahoo, Nike and Apple.
“Unlike winning an Olympic gold medal, where the problem is well defined, building a successful company is actually more like science, where you need to follow the trail wherever it leads. — Paul Graham, Venture capitalist”
Sometimes all you need to get started is passion and a clarity of purpose. So do not waste time writing about your idea, spend more time doing it and learning from any failure you encounter.
On January 27, 2021, Techpoint Africa will be hosting the brightest minds in decentralised finance/crypto at the Digital Currency Summit tagged “Building the money of the future” Click here for more details, registration and sponsorship.
Report: Millionaire West African startups” raised over $1.806 billion between 2010 and 2019, 97.9% of which went to Nigerian startups. Get a free overview and 50% purchase discount here.
Listen to Built in Africa, a podcast by Techpoint Africa
Writer. Interested in EdTech and tech careers