Why you should burn your business plan

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A couple of years ago Antonio, a good friend of mine, decided to open a bar in Pantelleria, a small island 70 miles off the coast of Sicily. Its turquoise lakes and volcanic landscapes are persuasive enough for Giorgio Armani to split his time between Milan and the island. Madonna and Sting are regular visitors too. But if you go to Pantelleria today you won't find Antonio's bar anywhere, and it's not for the reasons you might expect.

Antonio had the foresight to produce a business plan. He used the structure of the plan to feel his way around the opportunity. Who were his customers going to be? He spent time on the island chatting to the locals and to the tourists. What was the competition like? Dedicated, late night partying in the handful of bars already on the island was the only way to answer that question. How much would it cost? He found an old villa, produced plans to convert it to a bar and worked out what the running costs would be. Once he'd been through the process he could see that his head clearly contradicted his heart. There was no way he could make it work.

I count this a success. The process of creating the plan helped Antonio make the right decision. Planning saved him months, if not years, of disappointment and misery.

It's not the powerpoint slides or the twenty page document that counts. The colourful hockey stick graphs, quadrants and pie charts do not matter. It's the act of production that is critical. A business plan provides a framework for thought. You're standing on the edge of a chasm, in the dark, ready to leap. You need to know that a better place lies across the gap, and that you've remembered to tie your shoelaces.

Here are some more reasons why it's the process that counts:

• Helmuthe von Moltk, the chief of staff for the Prussian army said no battle plan survives contact with the enemy. You need to think about different outcomes, and understand the lay of the land.
• If you're setting up in business with somebody else - and I recommend that you do - then a plan has another advantage too. It's a way of reaching a shared understanding about what you're trying to do and why you're trying to do it. It will force you to check that you share common assumptions and goals, and that they hold true.
• Writing can be a good way to think. Putting your thoughts down on paper forces you to crystallize them.

Once you've written your plan, you'll put it in a drawer and leave it there for twelve months. The next time you read it, it will be to have a good laugh about how wrong you were.

So write your plan - that's important - and then burn it.

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Comments

[Business For Sale]

Nowadays the business plan increasingly appears to be a document for allowing an individual to articulate and capture personal vision, where its main use and value is to a founder. Externally, that is, to investors, venture capitalists, and other parties, its best use is probably to level unbalanced desks. The business plan is dying.

[SWOT Analysis]

Hi,
Thank you for sharing information in the blog. You are really doing a good work. I personally like this blog and appreciate your efforts.

A SWOT analysis

[Business Planning]

Thank you so much!!!

[David Brown]

Meticulous business planning may not be as popular as it was a decade ago, but all the same with a clear vision and definite plans you get immense confidence - a must for all times!

[Shaun]

I think this article has an interesting insight into the relevance of a business plan nowadays and it can influence heavily whether or not someone will go and set up their own business or not. It can be the best document you ever write, particularly as this story shows the idea of the business sounded great but the reality can be very different. The Business For Sale market has always been highly competitive, which shows the increasing demand to buy and sell businesses.