What price for a business plan? Its worth at least £200 to not bother with one...

My background is a mix of big companies and little companies, and one of the constants in all of these companies is the necessity of writing up how you plan to spend the money you're asking for. For all the differences in each company, they have all asked for a business plan for new products, new marketing strategies or change management programmes. My current employer needs 5 business plans to get a new product off the ground (albeit at different points in the process of innovation). And each business plan has to go through the hierarchy before it comes back down with the amends before it gets to the decision makers, who don't actually read it cover to cover, but simply skip to the financials, give their opinion (usually it's not big or quick enough). Each business plan takes a minimum of two weeks to pull together and covers a host of areas from production, marketing, sales, HR, finance, media relations, legal, IP, and distribution. It's an industry in itself, and for a while that's all I seemed to do (and all I thought that was necessary to do to make a new product a success).

Recently two things have struck me about the need for Business Plans.

First of all I haven't done one for the Internet venture I'm involved in with my Business Buddy. Only in the last couple of days have we been asked for a Business Plan. We didn't need one when setting up our business account at the bank. We didn't need one when opening accounts with our suppliers. We didn't need one when we were inviting web developers to pitch for building our site. We didn't need one to raise finance (it came from our own pockets!). We didn't need it to sort out the role profiles we were both going to undertake (we just agreed it between ourselves and got on with it). We didn't need it to set up the company with Companies House. We didn't need it to inform HMRC about our Tax status. We were only asked for it when we requested an Internet Merchant Account from a competitor bank. And the only reason we asked about that was our current bank were asking for £200 to set up an Internet merchant account. We've now decided to pay £200 rather than the hassle of developing a business plan. Our time needs to be spent on sourcing our products and sorting out the glitches on the web site with the blasted web developer (he hinted!). We're far more interested in learning how our business works than actually writing about how we think it could work.

Secondly, I recently read a blog about writing a Business Plan and it struck a chord, especially with my experience of writing Business Plans in my current employer. Business plans are a cacophony of... how can I put this... random guesses. I can't tell the future any better than anybody else. I, nor anybody else, has a special gift for predicting the future success of a business through a business plan or through tea leaves. And writing a business does not miraculously give me that insight into the future. Some people argue that without a Business Plan you won't know where you're going as you won't have planned what you're doing in a couple of years time. Couple of years?!?!?!?! Who's plans are actually accurate within a couple of months of launch???

My final thought about writing a business plan is the emotion that goes along with it. Writing a business plan is tiresome. It means checking and re-checking your numbers and words. And with every word that is typed, it means you are one more word away from actually doing something and that sets in motion a cycle of procrastination about getting the business plan right before you give it to people, before you get the funding, and before you start on your idea. I found with my last idea that when I gave up on writing my business plan, I actually picked up making my idea come alive. And with every step taken in setting up the idea came more energy. I was able to tinker it based on real evidence rather than "guesses".

As you can tell, I'm not an advocate of Business Plans, but I am an advocate for the thinking that a Business Plan promotes, and the challenge that arises from those thoughts, as opposed to keeping them safe in my
little head, secure in the knowledge that it's just my own thoughts. And there needs to be a balance between thinking and doing. So I suggest a business plan that can be written on the back of a fag packet and kept inside your head, while you get on with building your dream.