On Business Plans

How do you know what is going to happen in 3 years time?  How do you know what's going to happen in 1 years time.  What new technologies will be available, what will the dollar be worth?  These are pointless questions, that can't possibly be answered unless you have a time machine.

Yet those are the exact questions you try to answer when you create a business plan.

Back When I Was in School

I never took a business class in school.  Yet, in high school I was running a download site for webmasters.  It was doing well enough - well enough for a kid.   Although I didn't take the business class, I knew the teacher from the class quite well, and he one day asked me to give a quick presentation to his class on my ventures.

I gave a brief run down of what I did and how I made money.  I don't think anyone was too interested - I'm sure 99% of people who take business class don't actually want to run a business.  But then came question time, and I was asked by the teacher:

"Do you have a business plan"?

"yes" I lied.

The truth was, although I had read every business book in my local library on the subject, I hadn't actually bothered creating one for my venture.     My business sort of just happened.  It started small and I worked on it for a few years until before I knew it, I had a business.

So why did I lie?

I knew what they had been taught in the business class for the past 20 weeks.  I knew that the entire course was centred solely around creating business plans.  I knew they all had created business plans for their faux businesses and the teacher had taught this method with absolute conviction.    Truth be told, I didn't have the guts to stand up in front of that class and say that I thought they doing the wrong thing.

Out of 30 Students... Not One Entrepreneur

I looked back at the class I stood up in front of over 5 years ago and tried to find at least one student who had gone on to become an entrepreneur.  Not one.  Theres a few entrepreneurs from my year group but none who took business at school.

There are many businesses and fortune 500's that are run by MBA's - there are also many that aren't run by the MBA crowd.

3 Out of 5 Will Fail

Starting a small business or company.  Statistically the odds are against you and you're going to fail.     A third of you will make it to three years but the majority of you will fail before 5 years pass.      And the numbers don't get better as time goes on .

These are the small businesses that have created business plans.  They have created guesses of what the future holds.

Plan As You Go

Don't stop thinking about the future.    But please, please, don't bet your businesses success on a swot analysis.  One you write that business plan, I guarantee, you'll never look at it at again.  Or at least look again and take away any value.  Plan as you go.  Be willing to adapt and change.    Start small, and grow.  Plan your next move when you actually have some real data.

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