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Friday 5 March 2010

What's the point of business plans?

This evening I attended a really interesting and informative event run by The Entrepreneurs' Forum at Durham Business School entitled "The Challenges of Growth".

It was a panel event where four successful entrepreneurs were quizzed about how they grew their businesses.

One particularly interesting point was that none of the four said they set out with a detailed business plan and they had all only used business plans for raising finance or later in their business when they needed to co-ordinate the activities of  a much bigger workforce.

They all seemed to feel that the flexibility and agility they had been able to display through the lack of a detailed plan had worked in their favour.

I must admit I am inclined to agree with them, but what do you think?

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  1. I think the problem here is that there is a preconceived notion about what a business plan is and how it should be compiled / presented.

    When used for grants and funding a business plan needs to be in the expected format and giving the appropriate infomration.

    However, if a plan is to be used to provide a framework for the development of a business then the standard format is less appropriate. When a plan is intended to be a tool and an aid to the business then it can be developed in a way that is quick and easy to prepare and update.

    As an example of a project I was repsonsible for used a three page plan that led to a doubling in size of the organisation over a five year period and resulted in profits growing from £0.75 million to £1.5 million.

    Les Hodgson
    Next Level - strategic planning for businesses

  2. Some good comments there Les. I like the three page business plan. I think a plan in the detail required for funders can hamstring a business if you try to follow it when the business should be evolving and learning.