Is business planning pointless? 8

It’s a common refrain these days, voiced by “experts” and busy entrepreneurs: business plans and business planning are pointless.

It’s a seductive argument. The world moves fast, how can you forecast your sales for three years from now when it’s hard to predict what’s going to happen in three weeks? There’s clearly no point in planning…

On the surface, it’s easy to agree. But when you think about it, it doesn’t make any sense at all.

Let’s say you were driving across the country. You’ve figured out the route you want to take and have plotted it out on a map. But along your way there’s road construction that you have to get around and then you end up taking a scenic detour that takes you hundreds of miles out of your way. You’re not on your planned path anymore.

But because you bothered to plan your route in the first place, you were familiar with the roads around the construction sites and were able to find a quick way around them. Because you had your map handy, you were confident that you’d find your way back to the main highway after taking the scenic route for a while. Your original plotted course on the map may be useless, but not the planning of the trip.

That’s a long way of saying that the written business plan document is one thing, and business planning is quite another. Alan Gleeson explained it nicely in his recent rebuttal to an anti- business planning article on Small Business Can:

Part of the confusion lies in the fact that the phrase ‘business plan’ is a homonym (i.e. has two separate meanings), a physical, detailed business plan document and a plan for your business. Viewing business planning through this lens makes it easier to see how valid criticism of the former can taint the latter. Business planning entails setting goals that need to be accomplished, managing cash flow, establishing milestones, allocating resources and forecasting sales. Activities that can be assigned to individuals who are then held accountable. Are you really suggesting that these are pointless? What of the old adage,’what gets measured gets managed?’ Planning is an integral part of management and should continue to be.

What do you think? Do you think you should skip thinking about the future and planning for the possibilities, or that the uncertainty ahead makes planning even more important?

 

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  • R. C. kathale

    The value of  business planning is not the final document that gets produced, but the fact that it compels the entrepreneur to think about all aspects of business. it is a commonly observed fact that most entrepreneurs are technically skilled people who know how to make something and they want to make a business out of it. . They do not think and do not like to think about the other aspects of doing bussiness. if they just rush into business, they are lokely to be doomed  Planning saves them. I am a firm believer in the process of planning. I feel the opposition to business planning comes from those whose ideas are not clear and who do not like to work in a disciplined manner.  — R C Kathale

    • Dnewman

      You are exactly right. How many great chefs fail at owning resturants. The smart ones do what they do best and find a business partner to do what they do best; create and execute the business plan. — Darrell

  • Dnewman

    Talk to any successfull person and many still have their original plan and written personal goals. It is the only way to stay focused and track what has worked and what hasn’t. If the plan is iron clad and inflexable, rethink it. Write in a list of “what ifs” and ways to overcome the setbacks. I can’t imagine making an investment and then just winging it. 

  • http://twitter.com/orangemanta Ron Immink

    Hi Jay,

    I am one of these “experts” and there was no need to put it in between brackets ;). 

    Here is my blog that Alan responded to; http://www.smallbusinesscan.com/community/blog17/1496-business-planning-is-pointless

    I suggest you look up Heidi Neck in Babson University. She heas some interesting views on the subject. 

    Ron

    • http://www.paloalto.com Jay Snider

      Hi Ron,
      Thanks for your comment. I did read your post, and I’m familiar with the arguments made against business plans. I just happen to disagree. Thinking strategically about the future of your business is business planning and is a key component of good management. I think this conversation/debate continues because none of us can divorce “the business plan” from “business planning.” Would you argue that there’s no need to budget expenses? To have an idea of how much inventory you’re going to need on hand? No point tracking and projecting cash flow?

  • http://loveyoursmallbusiness.com/ Jo Foster

    Interesting. I believe business planning in some form is crucial but think that it doesn’t necessarily have to show up as a 42-page word document that is so cumbersome and often uninspiring for the biz owner that if it does get finished in the first place, it is never re-visited.

    Biz planning can (and I’d argue should) but a creative, holistic, fun, colourful process that leads to an exiting vision for the future and inspires clear thought about the processes needed to make that vision happen… and we are seeing plenty of great results for women entrepreneurs who are working through this process with us!

    Jo

    • http://www.paloalto.com Jay Snider

      Thanks for the comment Jo, I couldn’t agree more!

  • http://www.callbox.com.my/ Christine Steffensen

    In my opinion business planning is not even pointless because business planning helps the business to derive its advantages and get benefits out of them. Business Planning helps the company to formulate objectives and goals clearly.