Why You Should Write That Business Plan
According to a research study by Panel Study of Entrepreneurial Dynamics II done on a representative sample of more than 1,000 would-be U.S. entrepreneurs over a 6 year period from 2005-2011, it was found that entrepreneurs who wrote formal plans were 16% more likely to achieve viability than the otherwise non-planning entrepreneurs.
A business plan, in the beginning, helps to answer basic questions such as where are we now, where do we want to go, and how do we get there.
The real key to succeeding is not in the business plan but the ability to be flexible and agile in the environment that the business is operating in.
Does the timing of when the business plan is written impact the viability of the business?
According to the same research, it was found that;
On average, the most successful entrepreneurs were those that wrote their business plan between six and 12 months after deciding to start a business.
The optimal time that founders dedicated to spending on the plan were 3 months
The sweet spot for writing a plan was around the time when the entrepreneur was actually talking to customers, getting their product ready for market, and thinking through their promotional and marketing activities.
Timing really does matter. Do not write a plan too early, don’t spend too long on it, and make sure it is done alongside other activities that actually propel the venture forward.
Spending time writing a good plan is vital!
WHAT is the opportunity, WHO are your customers, WHY should your competition be fearful and HOW will you make money and operate.
It pays to plan!
**Adapted from HBR article by Francis J Greene and Christian Hopp When should entrepreneurs write their business plan. **
What section of your business plan will you tackle today?
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