Traditional thought about business plans is that you must have one to be a successful entrepreneur. However, there have been recent conversations by some business professionals that challenge this contention, instead recommending that entrepreneurs should spend their time running their businesses rather than creating plans. This exchange of ideas can only be a good thing, and the debate about the relevance of business plans will probably continue for some time.
Writing a small business plan is viewed as a burden by many entrepreneurs who see it as something that is done and then filed for future reference (actually, never to be seen again). Most of the business professionals who suggest that plans aren't necessary probably fall into this group. However, people who support the need for plans most likely see them as part of a process for business growth and development-a tool to use in truly understanding the business' mission, what needs to be accomplished, and how the business will meet targeted goals and objectives.
The decision to make or not make a plan may rest on how the term is defined. Business plans actually come in all shapes and sizes and meet diverse needs depending on if the entrepreneur just wants clarify about what needs to be done or if the goal is to attract financial institution or angel investor capital. Some entrepreneurs even use plans to create marketing campaigns or to attract stellar employees. All of the priorities listed here will play a critical role in how the term business plan is defined by individual entrepreneurs. Therefore, the idea of a rigid definition of what a plan is and what it does is not very practical.
The title of this article suggests that the lack of a business plan will spell doom for an entrepreneur. Why is this true, especially when many professionals in the business community don't think they are necessary at all? Well, the business plan concept actually represents the belief that an entrepreneur must take a honest, analytic view of her business, its operations and marketing models, and financial stability to determine what needs to be done-both present and in the future-to be success and profitable. It's hard to image this process occurring effectively if there isn't a plan of some kind in place (and in writing) that can be read, reviewed, and changed as needed.
The debate over the usefulness of business plans to entrepreneurs may be more productive if the focus is shifted somewhat away from the idea of having or not having one to a focus on determining how the plan can be shaped to meet the specific conditions, situations, and priorities faced by each entrepreneur. This change in focus would certainly produce greater consensus among professionals that business plans are critical and not having one causes small business failure.