Do you really need a business plan?

Dr. Jeffrey R. Cornwall has some rather unorthodox views on writing a business plan -

1. Business plans should be the last thing you do, not the first. The common wisdom seems to go like this: "I've got a great idea, so I guess I better write a business plan". Wrong.

2. Figure out how much you need to make in income and look at all of the non-financial factors that are important in your life. That becomes the standard you use to evaluate each feasible business that you identify. If it can't meet your needs, go on to the next idea.

3. Research the market to make sure that there is really a market. Try to figure out what a customer might pay for what you want to sell. And look carefully at all of the competition to see if that market is already being nicely taken care of. And by the way, there is always competition, no matter what you try to tell me to the contrary. If the market potential is marginal, go on to your next idea.

And 3 more bullet points here but I wanted to comment on number 3 above which is contrary to my own experience but then my own experience is probably the exception. What I mean is that we fell into our current business quite by accident in the sense that it grew out of pair of hobby websites which we launched in 1998. As those websites grew individually in popularity and the audience exploded when we amalgamated them in 2000 it became clear that we did indeed have a market.

Maybe you could say that the original hobby websites were the ultimate in live market research but before the websites there was no market, no customer and no competition!

Comments

[Randy Charles Morin]

My own experience as a startup junkie is that businesses w/out a business plan always fail. Businesses w/ a business plan don't always fail. It's not really the business plan that makes the business, but rather the effort of thinking about your business that leads to more ideas on how to run your business successfully.

[David Cowman]

I run a skydiving and parachuting school in Spain. I started this without a business plan and whilst the business is very successfull i find that i am frustrated at living in a small town with absoloutley no life whatsoever. I am now getting ready to move my operation closer to Madrid and to the edge of a much larger town.

While i am certain that i am going to create competition in the place I am leaving behind, im satisfied that my personal life ( and the life of my customers on their skydiving holiday ) will be better.

Between the rock and the hard place i choose lifestyle. Therefore i tend to agree with the doctors sentiment. After all what is the price of money ?