My name’s Barry Horowitz, and I’m a strategy and growth consultant. People say that business plans are dead or are obsolete. “Nobody is going to take the time to read all the way through.” And you all heard the famous statement from the military side: “No battle plan survives first contact with the enemy. In a business sense, sometimes they say “No business plan survives first contact with the customer.” However, there are several reasons that you should have a business plan.
The Devil is In the Details
Mainly it’s not the plan itself, but the process of developing the plan that’s critical. It forces you to think through a lot of important steps.
While it’s generally true that venture capitalists and angel investors might not read the full plan right away, they want to see an executive summary and hear your brief investor pitch. But many of the things you need to be able to say in those come from having thought through the details and from writing a business plan. If you’re approaching a bank, they may actually need more of a plan as well.
Building the Winning Team
Business plan also helps you figure out what you need for your company. If you’re trying to hire good people, the plan helps you explain what the business is about. Try to encourage them to want to join the team. You want to make sure that your team is aligned and working together.
Having a plan provides that roadmap. There’s famous discussion, and I believe Jim Cook from Boston Beer was talking with somebody about what happens if the team knows their strategy or your plan and they leave. His response was something along the lines of: what happens if they stay and they don’t know the plan? The business plan helps make sure that you’ve thought through all the assumptions, thought through all of the critical parts, and that you have a tool that helps guide your team to follow through