business plan

The following post is my response to a wonderfully provocative post by Jason Cohen, “Don’t write a business plan“.

I agree that most success is learned through trial and error and that most plans are guesses. Fine.

Having said that, most small businesses need periodic rigorous scrutiny that they never take the time to give.

Small business owners are going with their gut. It was good enough for all of their past success, so it’s good enough now, right?

Wrong. People develop blind spots. They develop fear of asking questions that might draw attention to weaknesses.

I suppose that a serial business starter will never need to face his weaknesses if he always turns sustaining the business over to someone else after an initial success. However, almost everybody else should be reinvesting and reinventing their business every few years.

I haven’t met a small business owner who couldn’t benefit from doing a deep dive on what they know and don’t know about their business. Once you’ve done that work, it only makes sense to apply what you learned and build a plan. Yes, a plan, if only a working list of priorities.

If you know the most important thing to do and you build an action plan for doing it, you’ll usually find that you don’t have time to do lower priority things. Over time, iterating on what actions matter most to your business will make your business much more successful than operating without a plan.

You make the valid point that most plans are built on internally sourced data. That doesn’t make them bad. Most people know everything they need to know to dramatically improve their business and build a great plan. But knowing something in a disorganized way and knowing something in a very organized way produces wildly different results.

Lastly, I actually want to defend the inane formal business plan that nobody will ever read. The utility of going through all the ridiculous work involved in building an MBA’s business plan is in thinking through a problem from a wide variety of angles, in an attempt to avoid dangerous blind spots and big faulty assumptions.

Sure, if you’re a business genius, you don’t need a plan. MBA’s and business plans are guiderails for the rest of us.

Don’t you think the world would be a better place if people were a little more thoughtful about what they were doing?

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