Chadrack
It's yet another Monday and as usual it is time for our Community Timeout here on the Web Income Journal!
(Every Mondays we discuss issues that touch our lives as bloggers and web entrepreneurs. If you have any question or issue you want us to discuss, feel free to send your suggestions using this form.)
Today I want us to discuss a very important issue that many of us have come to accept as essential when it comes to succeeding in business – a business plan.
A few years ago, a successful business mogul from my area came up with a Reality TV show, “The Apprentice” aimed at selecting a few budding entrepreneurs to be mentored by this entrepreneur who had succeeded in different business ventures.
The first qualification for anyone to be selected for the program was a well written business plan and of course, the ability to defend this plan and being able to convince the Judges that your business was worth it!
Watching that reality show and observing the young men and women defending their business plans immediately convinced me beyond any doubt that it is NOT really the best business plan that makes any one succeed as an entrepreneur.
Now, my conviction then was not because I had any problems with writing business plans but because I saw many of these people speak with passion about their intended businesses but it was clear that many of them do not have the knowledge of writing great business plans!
Of course, as expected many of these ones lost out while those with good business plans, strategically laid out and detailing every aspect of their intended businesses, were selected and given the opportunity to participate in the program.
Now, this brings us to the topic of the day…
As a Recipe to a delicious meal so a Business Plan to business success, right?
Business Plans – How Much Do They Really Contribute To Succeeding In A Business?
Do you really need a business plan before you can succeed in your business?
I decided to bring up this topic after reading a blog post on the Harvard Business Review Blog Network titled, “Great Businesses Don’t Start with a Plan!”
In the post, Anthony K. Tjan, the author of the post, categorically stated that from a survey carried out on hundreds of successful entrepreneurs around the globe, aimed at better understanding what it takes to be an entrepreneur and build a really great business, it was discovered that about 70% of those who succeeded in their business and had a successful exit (that is, an IPO or sale to another firm), none of them started with a business plan!
I’m sure you will want to disagree with that since every business book and advice always go something like this,
“To succeed in any type of business, you must have a business plan. Without a business plan you are heading towards failure because if you fail to plan; you are planning to fail!”
On the contrary however, Anthony wrote:
“[These entrepreneur's] journeys originated in a different place, a place we call the Heart. They were conceived not with a document but with a feeling and doing for an authentic vision. Clarity of purpose and passion ruled the day with less time spent writing about an idea and more time spent just doing it.”
So don't worry too much about a business plan. But to guide your thinking, improve a pitch to prospective investors, or better align your teams, consider these design points:
1. Identify and clearly articulate your Heart and purpose. Whether you want to call it vision, Heart, purpose or calling, be very clear on the why of a business — the bigger goal at hand.
2. The team is more important than any idea or plan. The top three priorities should be people, followed by people, and then people.
3. Think big, start small, then scale or fail fast. Per Lederhausen's advice, set the right first “start small” milestone; it will usually involve seeing people's willingness to buy or at least try your product.
4. Focus on a well-defined market sub-segment or niche. At least to start, think of where you can potentially be the best. This strategy is almost always more successful than being just another player in a massive market.
5. Understand your business model. How you will make money is more important than pages of Excel showing financials that are simply too hard to predict at this early stage anyway. Understand instead the basic way you will make money – is it through transactions, advertising, subscriptions, etc?
Hmm, you may want to call that breaking the rules to succeed in business!
Your turn: The question is, do you think Anthony K. Tjan and his team got it wrong somewhere? Can you say that from your experience a detailed business plan is necessary before you can start a successful business? Or, do you agree with their findings?
Please let's have your contribution in your comments below. As usual, make your comments useful and valuable. That way you will be of help to other readers. So the discussion begin!
Image credit: Flickr user – ocean.flynn
I understand that many entrepreneurs don’t start out with a business plan. My belief is, it then takes them longer to get what they desire, a successful venture. Eventually they will develop one. So my question is, why not start out with one. A business plan is essential to any business. Aside from the fact that it is required by many financial institutions, it helps flesh out your thoughts, identify any unidentfied needs, provide bench marks to achieve success and set financial needs and goal. So why wouldn’t you want to do that? Just my thoughts.
@Susan Cooper,
Very good points there. A business will definitely help you as a guide but the truth is you don’t have to wait until you have a business plan before you start a venture. This is what the findings have proved. Yes, you will definitely need a business plan as you go along but waiting until you have a business plan laid before you start is only trying to live the text book rules! If you have taken a good look at the 5 points listed in the post, you will discover that this is exactly how many started. Chances are, you even started this way! Or, you want to take a look again and dispute me?
Thanks for the comment.
Very good point, you may not have to go by the book but your definitely going to need some sort of plan.
@port st lucie physical therapy,
Then we are on the same portal! 🙂 Thanks for the comment.
Hey Chadrack,
I’ve read about this issue numerous times and I know from my own personal experience I didn’t start with a business plan. Heck, I wasn’t quite sure which direction I was going so for me it would have been useless.
Now that’s not saying we don’t have the desire or the commitment to achieve. So I say following your heart, your vision, etc. is the best way to go for most people. I think the “traditional” ways of the world aren’t always the best.
~Adrienne
@Adrienne,
That exactly is my testimony! I tried to read and study a whole lot of stuff on how to lay out a perfect business plan but try as much as I could, it was all in vain. In my heart I knew what I wanted and how I was going to go about it. I knew the business model that I was going to run but I never draw up a plan.
Yes, a plan is necessary as you go on but that shouldn’t hold you back from starting!
Thanks for joining the conversation.
I really like what Mr. Anthony K. Tjan said and I agree with all his points, but I think old is gold. In my opinion every entrepreneur who wants to build an online business should create a proper future plan. Sooner or later, everyone creates a plan but those who creates at first gets success quick.
@Ehsan Ullah,
I quite understand your point, but I don’t know where we get the impression that it is those who make out a plan at first that have the quickest success. That of course is nothing from the text books!
Go out there and get to know from those in the trenches the story is the same. Of course, a business plan will be necessary in the course of the business but if you want to sit down at the very beginning and lay out that plan before you start you will only be wasting precious time.
Ok, you may want to say that is sharpening the ax so you could chop down the tree in record time, but that is not really the fact. The ‘sharpening’ you need is the knowledge to run that business. Take a look at those 5 points again and you will see that if you truly have that in mind when starting you will be heading in the right direction.
@Chadrack, I didn’t mean that you just need to sit down and lay out the plan only without taking any action. I mean to say that we need to plan from time to time with taking action also.
Hey Chadrack, i can’t agree more, this is really a point. I also discovered the issue you’re addressing here and i think this post will surely teach aspiring entrepreneurs that you mustn’t have a business plan before being success in business although if you do have one, then its an additional benefit. I’ve also heard about the Aprentice before, i think by Donald Trump.
Thanks for sharing.
@Theodore.N,
Glad to hear from you Theodore. Frankly, we simply need to get our priorities right. That’s the point of this post! We are not saying a business plan is not necessary but you don’t need it before you can start your business. Those are classroom theories! The doing is more important than some document!
Thanks for the comment.
You have to need planning before starting any business and make some interesting quotes about that business. It makes you more aware towards your business.
@business broker,
Make some interesting quotes about that business? What has quotes got to do with starting a business? Yes, you need planning but do you know planning take different forms? Let’s learn from those who are in the trenches rather than some classroom theories. In fact, I know of many who have wonderful business plans but till this day, they have not done anything about them.
Your getting up and doing what is in your heart will drive you to your success more than flexing out some business plan!
Hello there I think that having an online business is very crucial,because there are many benefits we can get from it. but before we will become successful in this, we might encounter a lot of problem that cannot be avoided.
@Kate Brown Wilson,
Ok, Kate I agree with your point there. Yes it is crucial because the benefits are many. And yes, you will encounter a lot of problems before getting it right! Now, that is the point of the whole thing here.
So, the question is, do you need to go through all those problems and get them right before you start your business? Is the business plan your business or it is simply a document to help you with the business?
Can you now understand the point? The text book entrepreneur will tell you, you need it before you start but those who did it counter that. Who do you now follow? Want to answer me?
I’ve always heard that clarity and purpose comes from those that are in charge of making things run. If people trust their leaders it’s because they have their best interest in their heart and any goal can be achieved. You’re right though. Just because people the best business plan doesn’t make them the best candidate for the job.
It’s all about getting people to want to follow you. Gaining trust over time will always get people to follow. I think that’s how the business planner can get their workers to do their best job possible because of the fact that…most business leaders usually only know about 20% of the skills that lower paid workers know. But they know how to get people to come up with creative ways to be the best. In the traditional business model anyway.
The highest paid workers only have to know how to make friends quickly and easily, win people to their way of thinking, handle complaints, avoid arguments, keep human contacts smooth and pleasant and never put themselves above their workers. Arousing enthusiasm among their workers pays a lot of money and gets things done. At least of what I know about contributing to success in a business. Online or off. It’s really hard to tell if those people in the Apprentice really can get things running at top performance. Unless you work with them long enough and learn how they run things with their employees.
@Rick Salas,
Hmm, another lengthy one from you there. Though you have raised a whole lot of issues that has to do with the work place, I will try and restrict myself to running a business and that I want to pick up your point that, “Just because people [have] the best business plan doesn’t make them the best candidate for the job!”
And I agree with you 100% here. In fact this is the cruse of this discussion. It is not the business plan that will make you succeed it is your ability to handle the every day affairs and challenges of the business that will. And this is why focusing on trying to draw up a business before you start off will most times become a hindrance.
In fact starting off with what you know and then drawing up a plan along the way will better help you draw a business plan that is all inclusive and better designed to help you succeed.
Thanks for your input.
@Chadrack, I was mentioning how leadership applies in the workplace and really that people can apply these techniques in any business. It works for them and are the basic building blocks for online network marketing. Sorry about the long comment again. I try to give some tips and advice that can be used for online marketing whenever I post. I always appreciate whenever anyone does it for me. Take care!
@Rick Salas,
Sorry about the long comment? Never! I truly love it that way!
Yea, leadership is indeed important when it comes to building a successful business. You need people to succeed as made clear from the post, “The team is more important than any idea or plan. The top three priorities should be people, followed by people, and then people.”
Thanks for the reply.
@Chadrack, Yes, I like that. People followed by people and then people. I have to remember that. Thanks Chadrack!
@Rick Salas,
You’re welcome!
This is a hard question as I have started business in both ways and had varying results. One that was completely planned failed spectacularly, another with no planning was a complete hit, and I have also had planned businesses that work well and unplanned that do not. I think it is about the mindset of the individual and how adaptable and skilled they are. I believe a plan is the best way to begin, but I do not believe you are doomed to failure without one.
Enjoy the journey.
Mandy
@Mandy Allen,
Oh what a joy to hear from someone who has tried both ends! Frankly, your experience tells it all and your conclusion? Right on spot 🙂
It’s really about you and not any business plan. Like you pointed out, you may lay out every detail in a plan yet end up with a flop but when it’s in your heart and you follow that, just as pointed out in the post, you will bulldoze your way through every form of obstacle!
Thanks for this insightful comment.
Chadrack, you are absolutely right because when a group of friends and I wanted to start our company, we had to write a business plan and it has to be according to what was in our heart. Thanks for this Informative post
@Paul,
Good to hear that this post resonate with you. Only thing is, did you committed to writing your business plan before you started or you started and working with what was in your heart, you then detail out your business plan? Will love to hear from you.
Hey Chadrack,
With everything in this world we always have exceptions, that don’t follow the general rule. But the quote “Great Businesses Don’t Start with a Plan!” I personally feel is correct, I could create a new product that will revolutionize the home homes of everyday people. But I had not created this product with a business plan in mind. The business plan comes along later in the process and that’s what makes the idea > product > business possible.
@Simmeon,
Glad to hear that. Indeed, it is not the business plan that make for great businesses. Great businesses are made of ideas; a product of the heart! How much you are able to transform that idea into something useful will determine how much success you will achieve.
Thanks for the comment.
I am really impressed by reading this article and really very great information about business plan for the business success. its really great information.
I think we need to planning before start to do anything.Thank you for your sharing,I believe a plan is the best way to begin, but I do not believe you are doomed to failure without one.
A business plan can be as short as one page these days, unless you are planning for bank financial assistance – then have a book. Here’s what I see missing from the excellent 5 points which is what I hear from coaching clients where they go wrong: USE the plan. Take it out about once every quarter. Are you on track? Has anything changed? If something has changed, do you need to change something? In my first year in business as an independent speaker and corporate trainer, I had a business plan. I book like plan. I NEVER took it out. It took me twice as long as anticipated to start seeing my success. I’m just saying if you look at the plan you start with, regularly, then it’s valuable. If it collects dust or is tucked away, it’s almost useless as expecting a racehorse to win without a good jockey.
@Patricia Weber,
Great to have you join the conversation. I quite understand your point there. Business plans are important but the question is are they imperative in creating success in your business? Do you really need to write a business plan before you start your business?
I don’t feel having a successful business plan can only lead to a successful business. When we started our online business we were not too sure as to where we will be heading from there. But now after 4 years we are in a quite good position. Planning does help, but yes, not always. Sometimes random and unplanned things works way better. Thanks for bringing out this great post.
@Richa,
Well said Richa. Frankly, this is really the experience of many. Most of us never had an idea of what online business was about. We had an idea of what we wanted but not how we are going to make, which is one of things you need to lay out in your business plan. Following your heart as outlined in the post will get you on your feet and when the picture gets clearer you can map out your business plan.
Thanks for the comment.
you determine here that there should be a policy and plan to strat up a business ya it is.every business or house want that its base should be strong to make it high.base is refer plan of the business.If anyone want success in this matter so plan is also very necessary to score at top stage.
@Bhushan,
Ok, Bhushan, I got your point there. I really love that idea of building a house and having a plan for that house. I’ve always referred to building a business as also building a house and for this I quite agree with you! Thanks for the comment and please pardon me for the late reply.
Hi Chadrack
I don’t have a business plan. I know where I want to be though and have a mission to get there.
I think at the moment a business plan would be too rigid for me as blogging is ever-evolving and can lead into so many different things. I don’t want to be stifled by having something too formal at this stage.
Tim
@Tim Bonner,
Hi Tim, I can also say I don’t have a plan right now though I actually know what I want. And about blogging ever changing, I’ve over the last 3 years have course to alter both the look of my blog and also the marketing plan but in all of these I have remained on what has been in my heart. This is what I’m really pointing out here. Fact is, not every person who has a business idea really knows about business plans. I think in this our type of business where most of our operations are online and you don’t really need some financing from some corporation to run your business, trying to draw up some business plan before you begin is really a waste of time.
Thanks for the comment. I apologize for this late reply. I’ve been engaged in other things all this while.
Nothing is inevitable. And we often see that one is completely planned failed eventually, but another without planning can achieve more.I think to succeed in the business including many thing, such as individual, the team, chance and many other things.
I can say that one must have business plan for getting success in it. The thing matters a lot that how you follow that plan.
A proper planning is always needed to start up any business,at first we will find some obstacles but do not let your attitude sown , failure are stepping stone to success. Good luck to all Entrepreneurs 🙂
@Jenni,
Yes, good luck to entrepreneurs! I indeed agree that planning is necessary but not a written business plan where you are expected to follow some specific format. Those are text book requirements!
Thanks for the comment.
Hey Chadrack, the points you laid out here are most definitely valid. I’ve done a couple of feasibility studies before and I must say that they weren’t utilized effectively because my clients were all too spontaneous to begin with. Conceptualizing a business plan has numerous benefits but can be tedious for anyone who has a solid background on the industry he wishes to be involved in.
Hi Chadrack,
The business plan is just a guiding source, but it is not necessary that if a business has a well-organized business plan, the business is set to flourish. For a successful business, dedicated and honest efforts are needed. The efforts surely pave way for success. Many of the businesses who lacked an initial business plan, worked quite well and made their mark. The article provides a nice reading. Thanks for sharing it.
Excellent blog with some valuable points. According to me to be a successful business man everyone should have a good strategy, without a good strategy one can’t bring their business to the top.
I want to start selling articles which contains keyword rich content that can be used for any kind of content business like content marketing, article marketing, creating eBooks etc?.
Hi Chadrack
By saying you don’t need a business plan to start the business is very true especially when you follow the points you have said ,but with time i think a business plan will be important in future when you will want the business to go to the next level.
thanks.
Steve
I like the part about making mistakes. Entrepreneurs are excited to make mistakes while working on a project. That’s not to say they want to fail. They don’t look at it like that.
Nothing is inevitable. And we occassionally see that one is exceedingly planned failed eventually, but another without planning can achieve more.i guess to find acomplishment in the business including many thing, such as individual, the team, chance and many other things.
you determine here that there should be a policy and scheme on strat up a business ya it is.every business or house want that its base should be strong to make it high.base is refer scheme of the business.If anyone want acomplishment in this matter so scheme is also very needed to score at top stage.
Like everything else, business planning has its pros and cons. It’s something good to have, but sometimes too tedious to make. Your insights are valuable, thank you very much for sharing such an informative, comprehensive article.
@Kristine,
Yeah, there are definitely two sides to a coin and it’s definite that nothing is indispensable. As much as business plans are necessary they are not indispensable.
Thanks for the comment.
Yes,yes. You got me. I do need a business plan to succeed in my business. Actually, we cannot succeed in anything without a good plan. So, I need a good plan for my business. Thanks for notifying me.
@Bonnie Smith,
Good I got you there. Hope you take the necessary steps and put this to use 🙂
Hi Chadrack,
I agree with you that the question of proper business planning is not that easy.
In my humble opinion, we still need some strategy to make our moves more or less reasonable. Sure, we should be passionate about what we are doing. Alll the best business ideas come from the bottom of our hearts.
Yet, another question is that we still need a strategy, We simply should perceive a business plan as something flexible, as we need to constantly adapt it to the ever changing environment.
Thank you very much indeed for raising this important issue and giving me this food for thought.
@Jack Milgram,
it’s really glad to know that many like you agree with this line of thought. Personally, I really think the idea of laying out a business plan before ever starting is nothing but a textbook one. Many of the successful entrepreneurs agree with this also. You see running a successful business is not something you can study in school for 3 – 5 years and then you say you now know it. In fact, when you are just starting out there are areas of the business you may not know anything about. Saying you have to write a business plan before starting will only keep you perpetually stranded!
We can leave that for the textbook entrepreneurs. Yes, when you have a business idea, look around, do some form of research of those already in the business. Get your own strategy in place and then hit the road. After you have some knowledge and experience about the business, you can now sit down and make those lengthy business plans.
Ok, sorry I’m not planning to go to anyone for loan, so may be that is why I just think this is the right thing to do. Of course, except you know what you are doing I don’t advise taking a loan to start a business. Start with what you have and build from there without anyone breathing down your neck.
Thanks for the comment.
Great topic! A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. For me, it depends on the business type if they really need a business plan because I believe that not all kinds of business are constant, some are just seasonal. Thank you for this post! I love the topic.
yes it was grate topic about business planing I agree with you that the question of proper business planning is not that easy. it helps me thanks for the sharing post
I think it’s very difficult to start with a businessplan, although I believe that this is one of the best things you can do. The reason it’s dificult is that you are walking a path in life where you never were and most of the times you don’t have a clue where you are going. But the fact that you are on the move is the most important thing.
Interesting article. I agree with a lot of the points. What I’ve found useful about having a business plan is really just giving me the focus I need. I am starting on my own, have no team to support me, so there is a lot to get done. It is far too easy to get distracted so the business plan helps me focus on my goal and the stuff I really really need to get done to make it succeed.