Great Businesses Don't Start With a Plan

Great Businesses Don't Start With a Plan
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You want to start a business. So you need a plan, right? No. Not really.

 

had a successful exit (that is, an IPO or sale to another firm), about 70% did NOT start with a business plan.

feeling and  It's not that all planning is bad. It's that efforts to write the "perfect" business plan usually lead to being precisely incorrect rather than approximately correct. One problem is that the content that most people focus on in business plans has little to do with the reality that will actually emerge. Many start-up plans emphasize some gigantic potential market and how getting just the smallest sliver of it will make them and investors rich. A colleague of mine offers the hypothetical example of selling a bar of soap for a dollar every month to just 0.5% percent of the people in China. It's nearly a $100M business! Good luck making it happen, though.

It's not just start-ups. The strategic architecture of any business should incorporate facts from real world testing to allow one to adjust course as necessary. This is what  So don't worry too much about a business plan. But to guide your thinking, improve a pitch to prospective investors, or better align your teams, consider these design points:

2. The team is more important than any idea or plan. The top three priorities should be people, followed by people, and then people.

4. Focus on a well-defined market sub-segment or niche. At least to start, think of where you can potentially be the best. This strategy is almost always more successful than being just another player in a massive market.

There appears to be a perennial market for how-to classes, books, and templates that promise almost "color by number" instructions for populating business plans. While aspects of those tools are helpful for a structured approach, they are more likely to mislead because of their emphasis on completing the plan of a business before uncovering its soul and demonstrating whether others connect with it. People feel a sense of accomplishment upon completing their plan, but what does that plan really get them? Filling worksheets can never replace zeroing in on the passion and purpose of your business. That Heart has to be there day one. The most researched business plan holds little value without a genuine Heart behind the idea and the Guts to just get it going.

 

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