Do You Need a Business Plan?

As a small business owner, especially when you are first starting people will likely tell you that one of the first steps is to create your business plan. We full heartedly disagree. Especially as creative professionals, you’ll waste your time making a plan that is not going to end up working the way your paper says it should.

Throughout this article we’ll look into why the Small Business Administration and websites like it claim that you need one and give you our reasons for why you do not.

What is a Business Plan

A business plan is a written outline of how a business plans to achieve its goals. It is generally made up of an executive summary that has some sort of mission statement, an outline of the product/service that you’ll be offering, an analysis of the market, a marketing strategy, a financial plan, and a budget. Some business plans may include more components depending on the needs of the business but overall It will lay out a “roadmap” of objectives for marketing, finances, and operations.

If you google why you need a business plan, you will be faced with a whole slew of top 5 lists that spell out the reasons that business plans are a must-have. We’re going to go over some of the more popular arguments and give our thoughts about whether they truly make a traditional business plan worth your time.

1. Explaining Your Ideas

A business plan is supposed to help you fully think through and explain your business ideas. Because many business plans include an outline of what you’ll be offering as well as market analyses, making a plan should allow you to explore what your business ideas are and find the best way to convey your ideas to interested parties.

While it is important to fully idealize what you want your business is supposed to be, a business plan is not necessarily the answer. Especially for someone in the creative world, how are you supposed to explain your art through a stiff, business plan? You cannot fully explain your business ideas without showing your creativity.

You should have a firm understanding of what your business is and the place in the market that your business will fill. That is an essential part of starting a business. You just don’t need to do that through downloading a cookie-cutter, business plan template and filling in the blanks.

Understanding all details of your business is important. In order to be successful you should have a strong hold on each aspect of business, like bookkeeping, marketing, and market analysis. Rather than spending the time crafting a business plan that would impress the next banker, learn about the parts of running a business that you might not be as strong in. Understanding the operations of a business will be far more beneficial in the long run than a traditional business plan.

2. Directing Your Business in the Right Direction

Many articles claim that a business plan is necessary to set goals for your business and achieve those goals. The idea being that writing down your goals and fully realizing a plan to achieve them will assist you in making decisions that will lead you to attain those milestones. This also lets you look at what has been working and what hasn’t, so you can adjust your business direction accordingly.

Once again, that is half right. It is important that you have an idea of what you want to achieve. “Being successful” is far too broad of a goal. You will need to set more specific goals so you can have a direction for your business decisions. However, you still have to be flexible enough to entertain new ideas.

If you are too busy focusing on getting the business opportunities you have decided you need in your business plan, then you’ll miss out on opportunities that could be beneficial. Don’t get hung up on what opportunities or steps you should be taking, and focus on what is in front of you. If you are offered an opportunity, assess what you can gain out of that and if you feel it is worthwhile. You shouldn’t be looking to see if it’s specifically written in the business plan.

Business plans also stifle your innovation. If your business plan is supposed to direct your business, then you cling to what the plan says. It keeps you from always looking at your business with a fresh perspective or attacking problems with a new approach.

To put it simply, figure out what you want to do and go do it.

3. Checking if it Works

Business plans, especially when being presented to potential investors, is a way of proving the efficacy of your business. Supposedly, you can spot problems ahead of time and determine if your ideas will actually work.

This may be true for more black-and-white industries but for creatives that’s simply not the case.

As an example, Cat Leblanc when starting her online coaching business, she realized that a business plan was not necessary for her success. She pointed out her business would be fitting into a fast-paced market that was always changing. In order to keep up she would have to rewrite her business plan every time the market shifted, which was just not realistic. She also explained that her ideas simply need to be tried out, no data on paper was going to accurately tell her if it would work or not.

Similar to Cat Leblanc’s story, the creative market does not have clear yes’s or no’s. Creative ideas are often abstract and subjective in nature. You cannot figure out on paper if your business will be received favorably in the market without just testing the waters. The only true way of seeing if it works is to get out there and try.

4. Being Prepared for Anything

No matter how much work you put into your plan, nothing is going to happen like your paper says. Business plans give the false sense of security that you’ll be ready for anything and that simply isn’t true.

No one’s business plan included what to do when a global pandemic hits. Yet it happened and you have to find a way to make your business work when something you didn’t consider happens. If you are focused on trying to make your plan fit into the unexpected, you will not be successful. Instead you must make decisions based on the circumstances you are in.

Business plans will not keep unexpected difficulties from popping up, it just sets you up to feel like you’re failing. When in reality, just because things aren’t going as you planned, that does not mean that you’ve done something wrong. The key to being prepared for anything is just being willing to be flexible and the interest to attack problems head on.

5. Getting Funding

Seeking out investment is the one of the only time that you may actually need a business plan, if the investor wants to see one. However if you do not need or want to seek outside funding, then it will most likely never be necessary.

If you have a business model that requires more upfront capital and you need funding that’s nothing to be ashamed of. You may have to write up a business plan to present to investors. However, generally, speaking with family and friends about being investors is the best first step. They may want to know your market research and business model, what problem you plan to solve but they will not likely ask for a full traditional business plan.

So, Do You Need a Business Plan?

No!

A business plan will not keep you from having hurdles throughout running a business. You may end up somewhere completely different than what you initially thought and that’s okay.

It is important to understand all aspects of business but don’t restrain your business decisions to something a meaningless piece of paper tells you to do. Think about what you want to do with your business and be flexible to adjusting your business model when you need to. Just go out there and do it!


References


  1. Investopedia, Adam Hayes, What is a Business Plan, https://www.investopedia.com/terms/b/business-plan.asp.
  2. SBA, Allen Gutierrez, 5 Reasons You Need a Business Plan, https://www.sba.gov/blog/5-reasons-you-need-business-plan.
  3. Business Insider, Cat LeBlanc, I built a startup that makes up to $24,000 a month without a business plan — and I'm convinced you don't need one either, https://www.businessinsider.com/business-plan-advice-startup-entrepreneurs-2018-5.
  4. The Balance Small Business, Alyssa Gregory, 5 Reasons You Need a Business Plan for Long-Term Success, https://www.thebalancesmb.com/do-you-really-need-a-business-plan-2951567
  5. Small Biz Daily, Rieva Lesonsky and Maria Valdez Haubrich, Do You Really Need a Business Plan to Start a Business?, https://www.smallbizdaily.com/really-need-business-plan-start-business/
  6. Bplans, Noah Parsons, Do You Need a Business Plan? Scientific Research Says Yes, https://articles.bplans.com/do-you-need-a-business-plan-scientific-research-says-yes/