Sabrina Parsons, noted entrepreneurial expert and the CEO of Palo Alto Software, recently published an op-ed in Startup Beat on why business plans are a crucial part of any development strategy:
For entrepreneurs today, it’s not about choosing between planning and not planning, but rather, understanding which combination of the two works best for them. No strategy is ‘one size fits all,’ and all entrepreneurs should take the necessary steps to plan ahead and build a foundation for where their business is heading.
Lean startups—also called “bootstrapping” startups—build as they grow, rather than accepting huge investments early on in their development. They’re becoming more and more popular, and many of their ill-advised managers are forgoing the business planning process, assuming that if they’re not seeking investment funding, they have no need for a business plan.
What those managers are forgetting is that a good business plan accomplishes much more for their startup than intriguing investors and lenders; a good business plan actually maps out their business, and guides their growth. “In fact,” Parsons writes, “[startups] that do engage in business planning have been proven to grow 30 percent faster than those who don’t.”
Hard to argue with that.