5 Myths About Business Planning
Entrepreneurs are some of the most creative and intelligent people that this world has to offer. Intelligence, knowledge, skills, attitude and aptitude are a must to get a successful venture up and rolling. But having these doesn’t necessarily make one a successful entrepreneur. There is a secret ingredient to the overall mix and that is called planning. Over the years I have met several entrepreneurs across the globe, across the age spectrum. Interacting with them I can segregate entrepreneurs into two major subdivisions; the hit and trial maverick and steady planner. It would not be fair to rule out any of the methods but empirically the chances of success of a steady planner have been proven to be much higher.
Planning can and should be a part of every step in entrepreneurship, whether it’s conceptualizing your idea or working on a prototype or even looking to expand. One of the most popular planning activity for entrepreneurs is business planning. Business planning helps you to document your idea and gives you a structured roadmap to your journey.
Theoretically, there has not been a well-defined structure to entrepreneurship hence the concept is quite open ended. To add to that, there is a dearth of “technical”documentation of the entrepreneurial journey, as a result various myths about overall process has naturally cropped up. I have tried to jot down the top five myths about business planning which can be extremely detrimental to the entrepreneurial process.
Myth # 1: Who needs a plan? It’s all in my head.
Surprisingly, I have met several entrepreneurs who think in this direction. Well let me take an opportunity here to tell you that “PLANNING IS A MUST”. There’s in no alternative to it. When you are working on an idea it might not need a plan but the moment you want to turn it into a venture the overall process becomes complicated by many folds. Understanding your dependencies, schedule and budget is as important as breathing in case of entrepreneurs. Documenting your plan is extremely important. “You cannot have the complete plan in your head”; if you do then it will change constantly with your thinking and there is no way to track and monitor your business. Every successful entrepreneur has a plan. If you don’t believe in planning, better start believing in miracles.
Myth #2: Planning is such an hassle. Who has the time?
Planning definitely takes time, I would say the longer it takes the better it is. During planning, we brainstorm to understand the scenarios the business might face. It enables us to identify the activities and also equip us with the ammunition to face any kind of hurdles. Planning also ensures that we have a clear enough idea of what we are doing and why we are doing it. If anything goes wrong, without a plan it’s very difficult to identify the root cause and even if we understand the problem, it’s too little too late as we usually haven’t prepared for it. My suggestion would be give it time, invest in planning, rather than going about like a headless chicken trying to get it right.
Myth #3: Business Plan is only useful for getting funded
We all know the importance of having a well drafted business plan in the fund seeking process. Especially if you are seeking funds from private investment institutions like venture capitals or angel investors. But there is a notion about business planning that it is only useful for fund seeking which is a complete myth. Business Plans help primarily the founding team to ensure that their idea is documented in a structured format. It acts as a starting point to the overall journey. Business plans help in getting strategic alliances, collaborators, advisors and future team members. A business plan cannot be viewed as a simulated document; rather it’s documentation of the reality and to some extent perceived reality.
Myth #4: Planning is restrictive. It takes away the flexibility.
A plan is a strategic overview of the transition from idea to implementation. Plans are based on assumptions and perceived reality. Not every scenario can be captured in the plan right from inception but most can be. While you are driving your business, certain parameters might change. Based on you operations you must update your plans, revisit them. Business plan is a flexible bible. It gives the entrepreneurs the chance to monitor their assumptions and correct them. Without a plan it is very difficult to understand what’s actually going on. If you treat the planning to be an one time exercise then the overall purpose is defeated.
Myth #5: Planning should not have a budget. No need of seeking professional help.
As an entrepreneur we all come with certain skillsets. Entrepreneurs know their business the best as they are the creator of the idea. But while transforming their ideas to a venture there are some implementation hurdles. There are two ways of going about it; try and learn from the errors and get professional advice. As a practice, we should chalk out a planning phase, not too long and not too short as well. The planning phase should be long enough to give you a workable idea of what needs to be done. There are certain areas of the business like industry knowledge, market analysis, strategic initiatives which are widely accepted depending on industries. Reinventing every bits of business would involve a huge research and development with the chances of success diminishing. If there are grey areas which seem like a potential hurdles for implementing your idea, you should always set aside a budget to seek professional support.
Having all these in mind you must remember that a business plan is a strategic roadmap. It’s the starting point of your venture. It is not areplacement for the hard work, perseverance and passion entrepreneurs have. It just ensures that your efforts don’t go to waste.