Don’t write a business plan!

Please, never ever write a business plan for your startup!

Why?

• Noone reads it!
• The VC might ask for it, but will not read it either!
• What can you plan, if you don’t know yet, whether there is a business in the first place?
• Planning what your revenue will be a year or two from now gives you a false sense of being able to predict the future and control the world. Be humble: you can’t predict the future (relax, nobody else can either) and you can’t make the world do what you want.
• Writing a business plan eats up valuable time (often weeks and months) you should repurpose for more sensible tasks (like talking to potential customers).
• A business plan document forces you to write nice sentences, craft coherent stories and worry more about form than content or even action.
• A business plan is hard to change. In fact, it usually never changes; while reality around you changes constantly. You run the risk of living in a dream world drifting further and further apart from reality.
• People on your team feel intimidated by a business plan document. They shy away from changing it or making innovative proposals. Usually there is one person acting as the gate keeper for the business plan document, which effectively keeps the smarts of all other team members out of the business model.
• You feel tempted to execute a plan rather than learn about your market.
• You’re more likely to fire your staff than to fire your business model, because you put sooo much work into crafting the business plan.
• You ignore reality, because you put so much effort into your plan. You’d rather run into bankruptcy than being told, that your plan is not good. The more time you invested in writing the plan, the more pages you produced, the more nights you sweat about wording, the higher you value this first guess of yours (called “business plan”).

How did I come to this conclusion?

First of all I went trough many startups in my career. I participated in numerous startups as a founder, co-founder or coach. I have seen only bad things happen, if we wrote or were forced to write a business plan!

Furthermore there is ample evidence out there by practitioners of the Lean Method (Business Model Design, Customer Development, Agile Engineering) and Lean Startup. Many of them have seen startups fail, because they focused on the business plan. Look at Steve Blank’s lectures or read the book Lean Startup by Eric Ries.

If you want to make God laugh, tell him about your plans.
–Woody Allen

Will I be successful, if I skip the business plan?

Well, you will have enlarged your “luck surface area”. But there are so many other things you can do to improve your chances of success! The Lean Method, Design Thinking, Sales Safaris and other methods can make your life as a founder easier. They will help you to fail fast and have enough time, cash and enthusiasm left for a second, third or tenth shot. Don’t waste your time, money and enthusiasm on writing a business plan!

What’s the alternative?

A fantastic alternative to writing a business plan is learning and using the Business Model Canvas. It is a wonderful tool that counters many problems of traditional business plans and keeps you agile and learning quickly. The trick here is to apply this tool correctly (i.e. including the tracking of hypotheses and their validations, creating multiple options and so on). If you want to get started with it, check out this Udemy course on the basics of the Business Model Canvas.

If you’re interested in how all these methods can help you starting your business and what sensible alternatives exist for writing a business plan, feel free to contact me (leave a comment or reach out to me on Twitter) — I love to help. If you are ready to go full speed with your business idea, my team and me at Dreimannzelt can offer you a hand. I also do trainings and workshops — just ask.