Is the Business Plan Dead?
The last decade has been a golden era for the brand of the modern-day entrepreneur – part geek, part guru but 100% certified genius…the unimaginably wealthy, media-savvy star who, just for good measure, happens to be saving the planet at the same time – and all that without even needing a superhero costume.
As part of this narrative, terms such as lean and agile that describe radically new ways of starting a business have become increasingly familiar. Although estimates vary widely, indications are that the large majority of new start-ups fail to last beyond a few years, at a significant financial and personal cost to those involved, so it’s perhaps no wonder that there’s been such interest in different approaches that promise to either increase the chances of success or at least reduce the costs of failure.
Does all this mean that the traditional approach of building a business based on a plan formed from analysis and research is dead? Is all you need now a landing page and a bucket full of hypotheses? Maybe not – for two good reasons.
The first relates to understanding what lean development actually means; what it definitely isn’t about is just rushing into headless “doing” mode at the expense of all else; done properly a lean approach takes considerable planning, preparation and resource – and is definitely better suited to certain markets and business models than others. Ultimately lean is about gaining deeper market and customer insight, faster and cheaper. For me that’s all completely consistent with the objectives of any good planning process – so you could say it’s a case of “and”, not “or”.
The second relates to properly understanding the value a business plan brings. I’ve built more business models that I’d care to remember and my personal mantra once one is completed is simple – the only thing we know for sure about this model is that it’s wrong! But, that’s fine – it’s not meant to be “right” in the sense of being a perfect predictor of the future, instead its value all lies in the process of gaining a better understanding of your market, your numbers and your key drivers.
If you undertake the business planning process correctly, what you’ll have is a tool that sheds some penetrating light on how your business works bottom-up, how you can succeed and what will lead to failure. It’s not a guarantee of success, far from it – and beware anything that makes such a claim – but it can be a powerful tool in helping you to determine your own destiny. Operating without a plan is like flying without instruments – it’s only advisable for real superheroes.