Do You Really Need a Business Plan to Start Your Own Business? : Under30CEO Do You Really Need a Business Plan to Start Your Own Business? : Under30CEO
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Do You Really Need a Business Plan to Start Your Own Business?

| March 31, 2014 | 4 Comments

business plan

Some people argue that, before you start your own business, you need to have a solid business plan. You need to have a mission, a strategy and quarterly plus annual objectives. You need to know exactly what you’re going to offer your future customers, how much you’re going to charge them and how you’re going to keep them coming back for more. You need to know what your initial and recurring cost are going to be and how much revenue you’re going to generate in the first three to five years.

But what should you do when you’re not ready to develop such a plan? For example, you may have an idea for your own business, but you’re not entirely sure yet how to make money off it. Does that mean it’s not a good business idea, or that you should wait with starting your business until the idea has become clearer?

Absolutely not.

Some ideas need time and space to evolve into something concrete and viable. One of the best ways to do that is to take your idea into the real world and play around with it: see what works, what doesn’t and how people respond to it. This gives you the opportunity to get valuable feedback, further develop your ideas and learn how you could potentially make money off it.

Don’t get me wrong, I’m not saying that you can (or should) forgo a business plan. Knowing how you’re going to make money, who your target market is, how you’re going to reach them and where you’ll sell your products or services is essential if you want your business to thrive.

What I am saying is that, depending on the type of business you’re thinking of starting, you may not need a business plan straight away.

If your business-to-be is like the traditional (tech) startup and requires a decent financial investment to get up and running, it’s wise to have a solid business plan before you get things running. If, however, you’re thinking of starting a creative or service-based businesses that barely needs financial investment, you can get away without a business plan – at least during the initial phase!

A lot of these creative and service-based businesses are built around its founder’s passions and talents, so they are relatively easy to get off the ground. You can set up your own website for less than the cost of one caramel latte a month and you honestly don’t even need to be tech savvy to do so. Believe me, I’m the living example: I’m not super tech savvy, but have managed to build my own website by hanging out with my good pals YouTube and Google.

Having said all of that, it is essential that you use this initial phase to figure out exactly what your potential or ideal customers want and how you can deliver that.

After you understand that part of the puzzle, you can start to identify what the various (and most profitable) ways are to make money off it.

The key to making money off your business idea is to understand your (potential) customers, so it pays off to take time to get out there and get under their skin. Successful businesses know their customers, they understand what moves them, what they fear and desire, what they want to avoid and what they want to achieve. And most importantly, how they can help them to achieve this.

From experience I know it can be tempting to try and figure this out before you actually launch your business, but in the end this is only guessing. When you start rolling with your idea, when you take it out to the world, you get real feedback to help you shape your business and offerings.

So don’t be afraid to start small. All big things start small. Set up your website, start blogging, run pilots or do whatever you want to do to help you figure out what appeals and what doesn’t.

Start now with whatever you have. A business plan can come later.

The incredible thing is that when you decide to put actions behind your words and desires, amazing things will happen, things that you never could have predicted or planned for yourself. Taking that very first step is only the beginning of things and it will set the wheels in motion.

So what are you waiting for?

Let’s get started!

Iris Louwerens, creative business coach and founder of Dig Mondays, is on a mission to help people start exciting, fulfilling and thriving businesses that allow them to let their full creative, personal and financial potential out and live life on their own terms. Through her one-on-one coaching, mentoring, blog and live events, she encourages, empowers and inspires others to dream big, create a crystal clear vision for the future and find ways to make it all happen. You can follow Dig Mondays on Twitter or Facebook

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Category: Entrepreneurship

  • Jeo Ten

    Well, this is akin to taking a trip, even a short trip without a map. Sure, you can get there without a map by moving in the general direction.

    But you will find yourself wasting time, money and effort in short order. It’s worth at least a simple one page plan that lays out the basics; one that describes what your business is and does, how you will get started, and how much time you are willing to spend, how money you want to spend (even if $0 but this is unlikely), how long before you make a decision get serious, and what will cause you to get more serious.

    A business plan can be in your brain of course, so it’s really disingenuous to say people can start a business without a plan. Your thoughts are a plan.

    History is replete with failed businesses who had no plan at all (read, thinking through at least the basics). Yes, building a website is important … but that’s the least of one’s problems in getting started.

  • Iris Louwerens

    Hi Jeo, I never said you don’t a plan to get started so it’s a bit strong to say “it’s disingenuous”. I get your point though and actually agree you need a plan to get started. I believe that plan doesn’t have to be a (one-page) business plan, it can also be figuring out who your target market is and how you can serve them best – so that you can write a business plan after. The key is to get started and take it from there one step at a time.

    To use your “map metaphor” – imagine you want to make a trip, but you don’t have a map (yet). What do you do then? Do you refrain from making that trip because you don’t have a map? Or… do you go out and speak to people to figure out where to go? Find a store so you can buy a map?

    The point I’m trying to make is that not having a business plan shouldn’t hold you back from starting your own business – or to put it in different words, from making those first steps to figure out what your business could look like.

  • Roger

    Hi Jeo. Full disclosure, I know Iris and it is great to have the chance to add to this discussion.

    I agree with both perspectives in the thread. I don’t think a full whistles-and-bells business plan is necessary from the start. As you suggest, Entrepreneurs will know what: goods / services they are offering; their finances look like; actions they will take to market their product to their ideal customers.

    That information should provide the basic map to get them going in the right direction. They can add detail to the map and keep fine tuning it as their journey continues.

  • Iris Louwerens

    Well said Roger :)