An argument for Business Planning
Strategyzer created the Business Model Canvas. It is a practical one-page overview of the business model. For some, the business model canvas might suit the need. It is important to think through the enterprise. A few get into “paralysis by analysis”, but most charge ahead.
Charging ahead is not always leadership. Sometimes charging ahead is hubris. Common mistakes made by those without business plans:
1) Acting too few, or one data point. A customer purchases a widget. Venture Inventor heuristically assumes that the widget is the next big thing and commits a lot of resources. The one customer was an individual purchaser, a fluke. People lose their jobs.
2) Ignoring a vital corner of the business. The inventor purchased a one year plan on a domain, missed the renewal date, and the inactive domain held hostage for thousands of dollars.
3) Over 75% of the business comes from one customer. The customer went bankrupt. The inventor went bankrupt too.
4) Sale closed. The customer uses the equipment. Equipment causes a loss due to a product malfunction. Product liability insurance was not structured properly. Inventor went bankrupt.
The business plan looks at all aspects of the company and determines who, what, when, where and how. The business plan is the action plan for the enterprise. Operating without one is like driving to an unknown destination without a map.