Burn your business plan! Tips for a sustainable business

Harald Schützeichel

What makes an entrepreneur an entrepreneur? First and foremost, the fact that he has a business idea, which he pursues with commitment and perseverance. This idea (some say vision) is the prerequisite and basis. Everything else are tools: marketing strategies, distribution channels, technology and business plans.

The implementation of the business idea is a complex process that requires the entrepreneur’s creativity and flexibility. During the process, methods and tools change constantly. Sometimes so much that it sometimes appears, when viewed from the outside, as if a clear line is lacking. But this is definitely given as long as the entrepreneur doesn’t lose track of the target, his vision.

Of course, a thorough planning is part of every business establishment. And of course it may be helpful to make a business plan. But who sets off on the rocky road of a company creation, should above all not lose the track of the goal. And this also includes the sovereignty and flexibility of throwing overboard a few hours before valid plan. Starting a business is like a jungle crossing: at the beginning, you see in the distance the target you want to achieve. Obviously, you have to give thought to water ration, equipment, paths, food procurement. But in the moment, when you set forth and enter the jungle, you must be able to forget the plan. Then only one thing is certain: the reality of the jungle is completely different than the one planned and considered. Therefore, if you keep strictly to the plan, you will inevitably go under.

A good entrepreneur implements no business plan, but his business idea. Many successful companies have even been established completely without a formal business plan. The worth of a business plan is the thinking process that will be thereby set in motion. It has a positive value – also for yourself – if you manage to bring down your sorted thoughts to paper. Therewith, your own vision will become more concrete, more tangible. But: a business plan is already outdated at the moment it comes out of the printer! If you don’t keep this in mind, what was well- meant will slightly go into reverse: questions of detail will excessively come to the fore so that at the end you won’t see anymore the wood for the trees.

Worst of all are the forecasts over many years requested by many banks and investors. The entrepreneur shall provide information on how sales, profits or financing will develop over several years. Such a request may sound more reasonable than it actually is. Günter Faltin, professor at the University of Berlin, describes in a comparison why this is so:

„Imagine you should forecast the 57th minute of a football match. Absolute nonsense, you say? So please consider the following. A football game takes place in a relatively simple and stable configuration: the playing field is clearly defined. On both sides eleven players. The rules are known beforehand and do not change during the course of the game either. In contrast, how does the configuration, that a start-up company faces, looks like? The playing field is not clearly defined. It is linked in a not clearly definable way to parallel playing fields. What about the number of players? Answer: it changes constantly. Actually, completely new teams come along during the game, new start-ups as well as established players with new products. Others give up during the game and take leave. Even the rules change. A big discount store enters the market, someone offers its product or service on the internet or the advance of technology changes suddenly the products and the market. One could therefore argue that it is much easier to predict the phases of a football game than the situations into which a start-up gets.” (Günter Faltin, Kopf schlägt Kapital, Munich, 2011).

What remains is the awareness: those who implement their business plan have little chance of setting up a sustainable business. For the entrepreneur, business plans are just a mental exercise. He burns them right away – at most keeps a copy which he presents to banks and investors because these need for their decision, the illusion of a precisely predictable business development.

 


 

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