In business school, we’re taught the importance of writing a business plan. When I was working on my bachelor’s degree, most of my classes included a final project that consisted of writing a marketing or business plan. My current master’s program also centers on creating a business plan. Most business experts will insist that it is impossible to start a new business without a plan, and investors will not touch you with a ten-foot pole if you do not give them a business plan. Contrary to what I have always been told, two successful entrepreneurs say that business plans for a startup company are a waste of time.
Will Hsu co-founded the Los Angeles-based software company MuckerLab. According to his biography on MuckerLab’s website, Hsu has a B.S. in Industrial Engineering from Stanford University, as well as a MBA from the University of Pennsylvania. He has worked for several well-known companies, including eBay and AT&T, and he has started several of his own businesses. Hsu believes that business plans are an unnecessary aspect of a startup. In an interview with Inc.com, he told author Minda Zetlin that the “time spent on writing a 40-page business plan would be better spent talking, selling, and understanding customers and their needs.” Basically, he says you do not need the full business plans, just the ideas behind them. Hsu suggests buying whiteboards to write your ideas, such as your target market, suggested price, competition, etc.
Another businessman who does not believe in writing business plans is Chuck Blakeman. Blakeman is an author, speaker, and owner of Crankset Group, a consulting firm in Colorado. In one of his articles, How: the worst, mostasked planning question, Blakeman discusses flaws in planning too far in the future. He agrees with Hsu’s assessment that pre-planning is a waste of time, and lists several companies that either did not pre-plan or had to change plans, including Apple, Google, and Ben & Jerry’s. He says that life often gets in the way of our plans, and “the farther out we are planning, the less likely it is to work out.”
Both men raise excellent arguments against writing business plans and planning years in advance. Maybe it is because I am a Virgo, known for our incessant need to plan everything, or maybe it is just out of habit from business school, but I personally cannot imagine starting a business without having a plan. Every businessperson is different, though, and you should do what you feel comfortable doing. As Hsu and Blakeman suggested, nothing will go exactly as planned, and your market and customers will change. If you choose to write your business plan, remember that nothing is set in stone, and you will probably need to make adjustments along the way.