The Business Plan Dilemma!

I have been thinking long and hard on my opinion of business plans lately. You see, when I started imagining up this blog a couple of months back in November, I saw it as a one-stop shop for business owners in Nigeria. At the same time, a lot of what is going to come up on this blog is going to be written by me. Therefore, it is a reflection of me. It is this realisation that has made me think hard on my postion on business plans.

Why spend such valuable time thinking about business plans? It is because I have come to realise that business plans even in their best forms may not be the best documents to help develop a business idea. Back in 2009, I was a student at the Lancaster University Management School taking a class on New Venture Planning. I remember that we spent so much time going through the business plan. The teacher for the class talked us through the importance of the business plan, how to write one and how to use the business plan. Now, I am post-school and one failed business venture down and I am not so naive anymore about entrepreneurship. I am not saying I know everything about owning a business; I am saying that I have developed a healthy scepticism for some of the theories that I learned in school. Perhaps, this is because the real world does not bend to the will of theory.


I should also note that I took the class on entrepreneurship (I recommended it here) offered by Udacity and taught by Steve Blank. One of the early classes noted the fallacy of writing a business plan as a guide for your future business operation. Blank noted that business plan which is written before the potential business owner has had time to test drive his idea was bound to be useless when the business takes off. Also, business plans often contain metrics such as future earnings and cost that can prove dangerous to the long-term survival of a business if all planning are based on these arbitrary numbers. Instead, Steve Blank recommends the Business Model Canvas (learn more about it here). The Business Model Canvas is designed to be more of a living document than the business plan. It emphasises change to the vision as the business owner spends time test-driving their ideas through different phases. The choice of the Business Model Canvas is based on the perception of the start-up as an unstable entity in the quest for a valid business model.

Also, since I started reading extensively on business ownership and start-ups,  I have noticed an anti-business-plan trend among business accelerators and venture capitalists. Instead, lots of investment vehicles and accelerators request that early stage start-up just express their business idea. Granted these entrepreneurship programmes are based outside Nigeria and might have limited validity in Nigeria.

After weighing all the information above, I have decided to feature the business plan on my blog. The business plan is a static document and has its limitation. However, one important advantage that the business plan has is its ability to get the potential business owner thinking and expressing their expectations of the business. I remember about six months back, I got a business idea and frantically spent the whole night writing down all the thoughts in my head. The business plan allowed me to structure my thought and document my idea. Now, six months later, I have started a slow process of test driving the idea. I am now in more of a business model canvas mode.

The point I am trying to make is that, the business plan is not an obsolete document. However, entrepreneurs have to be aware of the limitations of the business plan. As an entrepreneur operating in a constantly changing era, the business plan is a structure for the thought, not a guide for future actions.

What do you think of the business plan?