Is a Business Plan Necessary to Build a Successful Business?
Over on IowaBiz I recently wrote about whether a business plan is necessary to build a successful business. I thought I would share it with our readers here. As an Iowa business lawyer I get the question a lot.
If you look at the statistics starting your own small business is risky at best. The conventional wisdom says you need to write a business plan because your chances of success are greatly increased if you understand the challenges you'll face and develop a plan to meet those challenges.
But the problem for many new business owners is that writing a business plan seems like a daunting task. Often new business owners want to make that plan absolutely PERFECT. They spend so much time working on the plan they don't work on the business. The reality is that no business is perfect and neither are business plans. As Iowa patent attorney Brett Trout loves to point out:
When you start a business, who knows where you are going to end up?
Some experts, including Guy Kawasaki, question whether a business plan is even necessary. Kawasaki points to a study from Babson College that shows there is no difference between the performance of new businesses launched with or without a business plan.
The findings suggest that unless a would-be entrepreneur needs to raise to substantial startup capital from institutional investors or business angels, there is no compelling reason to write a detailed business plan before opening a new business.
So what do you think? Do you agree with the study? Is the "Just Do It" philosophy the way to go or is a written plan necessary to build a successful business? What strategy has worked for you?
