This is a rebuttal to some past videos and articles in which Abe suggested that writing a business plan kills your startup. In this video Erik dialogues with Abe on why he thinks they are required if you want to be successful and to grow your business.
Abe wrote a previous article on how focusing on a business plan can kill your business and also mentioned this a few times in recent videos. In this video I discuss why I think if you want to be successful you need to have one – the good news is that this doesn’t need to be a burdensome process, you can start with the basics and build it as you go.
The 4 reasons I outline that you need a business plan are:
- It’s a reference for you to help keep you focused and bring you back when the going gets tough
- It’s a tool for bringing others along for the journey
- You’ve got to have one to solicit help growing (i.e. bringing on a partner or investor)
- If you need to get a loan to help keep cash flowing you’ll have it ready
I don’t want writing a business plan to be a difficult process, I think it should be easy and intuitive and recommend starting with natural language (if I met you on the street, how would you describe it?) Getting started is as simple as ABC, just answer the following questions in writing:
A – WHY are you doing this? What is your vision or the purpose of the business/organization? This could be personal, like “I want to become financially independent” or it could be far beyond you as an individual “We are here to eliminate early childhood death”. It should be a statement about why’re your in the game, and I’d argue if you don’t have an answer to this you shouldn’t be starting a business to begin with!
B – WHAT are your objectives? What are some of the things you want to accomplish by creating this business? These should be things you can achieve like “I want to receive $10,000 per month in passive income” or “to replace my full-time job with a business that is my passion”, it can also be statements about how the outcome effects related things you care about like “with no environmental impact”. The key here is that these are the things that you can measure and point to so you know when you are successful, or to put another way it’s the definition of success.
C – HOW are you going to do it? What are the activities you’re going to try? Start SIMPLE here and build upon it over time, DON’T try and boil the ocean! It might be something like “I’m going to find a retail location that looks like X and fill it with products like Y”.
Once you have your simple plan start executing. Don’t be afraid to modify, sometimes often, until you get the approach correct!
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