The Death Of The Business Plan?

I’ve been listening to a lot of bootstrapping and small business podcasts lately and I just realized that not one of them ever mentioned writing a business plan.

Now I realize, there’s a whole new generation of people who may never write or even use a business plan.

Traditionally, business plan were used to convince bankers, VCs, investors and business associates that you knew what you were doing. If you’re bootstrapping, the only people you are trying to convince are the customers of your product or service – and they don’t need no stinking business plan!

Personally, writing a business plan is an old habit: whenever I have an idea, I develop a short plan to see if it makes sense financially. I love writing and developing ideas, but I know most app or web developers may not enjoy this process – specially the financial projections and sales. :slight_smile:

What about you, fellow bootstrappers? Anyone using a business plan?

I think you hit the nail on the head with “short plan”. The old model of the exhaustive business plan is dead due partially to our short attention span and, yes, the fact that most smaller businesses aren’t going for VC or business/SBA loans. I think having a plan in google docs and letting it grow and mature as necessary is a good practice.

I don’t use a formal business plan.

But I do think it’s a good idea to put down in writing what you’re going to do, when you’re going to do it, and what you expect the result to be.

That way you can compare what you said you would do with what you actually did. This is good for keeping your productivity in check, and to prevent the problem of only working on the fun bits (like coding) and ignoring the hard stuff (like marketing).

Having said that I don’t do this as much as I should…

Agree with you Oliver…writing is a best way to present your business, your ideas and what exactly you are thinking of and all.

I think it is important to do some planning. Who is the customer, what will you charge, what marketing channels will you use, what is the least you can deliver for v1.0 etc. But big complex business plans are a waste of time for a bootstrappers, especially sales projections (aka ‘pulling numbers out of your ass’).

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My business plan story:

I ran an IT consultancy long ago. One of my business partners had an MBA so we put him in charge of planning. For our business plan, to determine likely capital needed, he made a 12-month worst case, best case, and most likely case scenario, just like the MBA education taught him.

He was also a severe pessimist. His best case projection had us barely breaking even. Worst case and most likely case were identical, and had us hugely in debt and bankrupt within six months. And that was with us starting with a client roster and signed contracts. What actually happened is we made money and doubled the size of the business within 12 months. I quickly learnt to ignore his forecasts.

Bootstrappers can usually start up on a couple of thousands dollars/euros/pounds/francs plus lots of founder time. So an acceptable business plan is usually “Let’s see how I go on $5000 and then reassess”.

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When I started my design agency straight out of uni 12 years ago, we were encouraged to write an in-depth business plan with financial forecasts, strengths/weaknesses, competition analysis etc. Truth is, we just wanted to get on with work, so it never got finished. Never harmed us I don’t think.

These days in the world of fast moving tech, pivots and agile development creating a plan for any longer than 6-10 months seems pointless. For our new thing, we’ve created a google doc where the whole team can contribute which outlines a very rough plan for the next 6 months. I think we’ll just keep changing it as we go.

For me, long term plans can end up with you going off course from the rest of your industry, or being left behind as things change, just because of the plan.