Alastair Dryburgh wrote a price in last month's Management Today, 'Eight ways to design a better start-up’. The notion of business design (i.e. how you shape your venture) is an overlooked consideration for start-ups and he makes some good points about planning:
“Be wary of planning. This may sound heretical, but don't have a detailed business plan. Plans are dangerous because you can become wedded to them, even if it is soon clear they won't work.”
Alistair’s principles can be useful but effective design is less about fixed blueprints and more about creating the right attitude as the foundation for business success. Design the shape and culture of your business, yes; but don’t spend too much time creating a beautiful theoretical model that will never work in the real world. Being liberated from a plan means you have the flexibility to prototype your ideas in the market and then reinvent your offering accordingly. For me, business design is not about getting your model right first and sticking to it. It’s about getting your mindset right but staying agile and flexible to adapt as you go.
And the October issue of Management Today just published a letter from me saying just that (click on the above image to view).
I've recently found that it really depends on the situation that you are in; if you are working for yourself and you have the funds to pay for your own venture then you can drive forward without a model.
ReplyDeleteHowever, if you are looking for investment it's more than likely that investors will want to see a very detailed business model and business plan.
I'd be very interested to hear arguments against the latter. Are there any investors that would invest based on a skeleton plan, a view of the current market and on belief in an individual's ability to use flexibility and agility to mould a business as it grows and they see the opportunities?
In my experience, the most profitable businesses (large and small) are the ones that have remained flexible over time. You need to in order to continue making money. That in itself is a plan. What I hate to see is people wasting time trying to accurately forecast year 5 sales. It is guessing after all!
ReplyDeleteI think if you are going for investment "these days" investors need to see evidence of success, not a 5 year sales plan.