Many entrepreneurs are working to launch their first business, ever. So it’s understandable that many business fundamentals are completely new, such as hiring, financial projections, HR guidelines—and business plans. While startups have an increasing need for structure as they make their way from a mere idea to a real product or service, what’s the deal with business plans? Are they truly necessary, and what’s do you get out of it, should you do spend the time to crank one out?
Like so much of the startup space, this falls into a big gray zone. Girls in Tech reached out to the startup community to see what they say. The answers we received were polarizing; either you think a business plan is a necessity or you don’t. Remember, if there was a guaranteed formula for creating the next unicorn, we’d all follow it.
What did you do for your startup? Share your experience in the comments! And, if you have another startup question that you’d like to see answered, ask it there, too.
Yes, make a plan.
“The old saying ‘if you fail to plan, you plan to fail’ has stuck because it is true. Just the writing of the actual plan alone is unbelievably helpful in getting to a deeper understanding about how your business will operate and where it is headed. Once you have a written plan, you have a ruler with which you can measure your successes and failures. You are able to track the progress of the work you are doing in the early stages.
Then as the business picks up, you are able to continue monitor growth and determine whether or not you are measuring up. If you are seeking outside funding, investors will be interested in not only current numbers, but projections and your plan for future growth. A business plan isn’t written in stone. You may need to or want to make adjustments or realign projections and strategies along the way. And that’s just fine. But you are really doing yourself a disservice not to spend the time getting to know your business on an intimate level through writing a detailed plan for its future.”
- Sarah Davis, founder, Fashionphile
“Yes, I think every aspiring, new, and established business needs a business plan. The plan doesn’t need to be 30 pages long but should have a blueprint it plans to follow with one, three, six, and 12-month goals.”
- Kristin Marquet, founder, Creative Development Agency
“The moment that you want to start treating your passion as a business and not a coincidental success, you’ll want to write up a plan. Even if you don’t need funding, a business plan acts as a roadmap to ensure that you have all of the components that you need in order to grow sustainably as far as team, execution, product/service mix, and marketing/sales strategy are concerned. Honestly, many a crisis could be averted if new business owners or hobbiepreneurs would go through the exercise of creating a business plan.”
- Amara Omoregie, CMO, amaraREPS
You don’t necessarily need one.
“To start a business, no, but to achieve certain milestones then yes. E.g. for fundraising a business plan really helps, for planning out your hiring strategy a business plans helps, however when you first get started, you need to make moves that will actually form a business. For example in technology you need a technical partner, you may need to build a wireframe yourself, you need to start interviewing potential customers. This is much more important than a business plan that 99% of the times is going to change very quickly as you start doing and learning.
- Ishveen Anand, CEO and founder, OpenSponsorship
“I started my business without having a business plan. I believe that by the time you’ve a business plan ready, it is already outdated. The way I approached it was to have specific goals/visions, such as: do my work so well that I gain clients purely through referrals as that meant that I was doing a good job; work with businesses around the world; put integrity as the core value of my business; clear communication and transparency; focus on delivering a niche-service (e.g. Google ads) rather than being a one-stop-shop; clear tracking of my progress as well as visualization of how I want my business to be; the ability to work from wherever I want. In the last 1.5 years that I’ve had it, it is working well and I am running the company from any spot in the world.”
- Pamela Wagner, founder, Ajala Digital
“In theory, I think having a business plan is a great idea…I quit my job, started the business, made a ton of mistakes and went through a larger learning curve than I ever would have imagined. Six months later I had the start of a business.
Granted, I’m sure a good business plan could have cut down on much of the pain that year and a lot depends on the scale of the business. A service-based business doesn’t require the equipment, investment or inventory many others do. However, after working with many entrepreneurs and startups, I also see how unpredictable the market is. You never know how your timing will be or how many pivots you’ll have to make. And I fear this desire to create a perfect business on paper often holds us back from doing the dirty and hard work of diving in and getting started.”
- Larissa Pickens, founder, Float Design