By Henry Cazalet
Startups are bombarded by helpful advice. It comes at them from all angles. There’s no shortage of experienced and battle-weary entrepreneurs willing to pass on their pearls of wisdom to an eager audience.
Much of their advice is sound and practical, built up over years of learning from their own mistakes. Tapping into these precious resources is a very sensible way of avoiding the traps and pitfalls they have fallen prey to—why make the same mistakes that someone has already made for you?
But a note of caution: Some advice continues to be trotted out with little of no thought and is often not backed up by evidence.
There’s one piece of advice that we’ve all heard before that should be dismissed immediately. It’s often one of the first pieces of advice that startup entrepreneurs hear: “You need to have a detailed business plan complete with three-year financial projections. You need to have an in-depth product and marketing strategy and a fully costed company road map. The more detailed the business plan, the better your chance of success.”
This broad advice is often closely followed by one of these clichés:
- “If you fail to plan, you plan to fail.”
- “A goal without a plan is just a wish.”
I find this advice patronizing and infuriating for so many reasons, but here are my top six reasons why having a detailed and hefty business plan document could be the worst idea for your startup:
1. It ties your business to an inflexible, rigid document
Business plans are tied to a particular moment when they were created. They take no account of fast moving, dynamic market conditions which can make them just plain wrong almost immediately. Small misjudgments, or not being able to predict the unpredictable, can instantly write off huge swathes of your document.
You won’t actually know what to expect until you’ve launched your new business. No amount of forward planning can replace the reality of the first few months. Business plans just don’t have the flexibility to adapt to conditions as you find them.
2. Business plans suck up your time like a never-ending college dissertation
Nothing will remind you of college more than the drudgery of creating a detailed business plan. It’s easy to forget that the primary audience for the document is you. Potential investors won’t thank you, either, if you present them with a hefty document that is likely to bore them rather than excite. And it’s easy to start believing that completing your business plan gets you closer to launching your new business.
Other Articles From AllBusiness.com:
3. You’ll ignore it as soon as you’ve made your final edits
Despite the monumental, mind-numbing effort used to create them, most business plans never see the light of day. Almost as soon as you press publish on your spangly new website, the ludicrous document has become irrelevant as you come to grips with the reality of running your own business.