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Do You Really Need a Business Plan?

Get Started on your business plan by downloading Small Business BC’s Business Plan Template and Cashflow Forecasting Tool.

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Lean thinking doesn’t mean no planning.

There is a stream of thinking that, to be successful starting up a business in the 21st century, you should practice lean thinking. One component of this theory is that you shouldn’t conduct extensive market research or write a business plan.

I agree that you need to be flexible to meet ever-changing market needs. However, that doesn’t justify following the ‘don’t have a plan’ strategy.

Whether you take the time to formally write down your plan or not, you still need to know:

  • What you plan to sell. If you can’t articulate what it is, how can you offer it or convince people to buy it?
  • Who your target market is. Research doesn’t have to be complicated. Simply talking with potential clients or industry contacts is primary research.
  • What your clients’ needs are. You can offer whatever you want, but you’re not going to make any money if no one is willing to buy it.
  • How you’re going to operate. You can have the best concept ever, but it won’t work if you don’t know how you’re going to produce your product or service at a reasonable cost and get it to your customers.
  • How much money you need. Bankers or investors will require some sort of business plan, whether it’s a ‘traditional’ plan or a streamlined proposal. And they will require financial statements and a good credit rating to back it up.

Think about the purpose and the audience of your plan. Some funding programs require more comprehensive plans; some require less. And if the plan is simply for yourself, then you decide how much work you need to put into it.

How much flexibility you have depends on how much time, money, and support you have. You need to be open to change and be adaptable, but you need to be strategic about how you do it.

It’s great to be able to take the meandering path to a successful business. However, without a plan, many entrepreneurs tend to go through several failed attempts before they hit the big one.

Which shows that not writing a plan is not a new idea. It’s simply good re-positioning. Even the lean thinking concept (derived from the Toyota production system) is at least 15 years old.

A plan doesn’t limit you, unless you get too attached to it. A plan is a roadmap, a lay of the land, and you can always decide to take another route. But at least you’ll know where you’ve been and in what general direction you’re heading.

Get Started on your business plan by downloading Small Business BC’s Business Plan Template and Cashflow Forecasting Tool.

Download Now