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Sunday, August 20, 2017

Do I Really Need a Written Business Plan to Succeed in My New Business or Not?

You can succeed in business without a business plan initially, Dangote and Doyin group of companies have proven this and likewise you can fail without a business plan like scores of community banks and micro finance banks that packed up shortly after coming into business. It ultimately depends on some factors but the most important of them is – the business knowledge of the arrowhead/decision maker of the business
There is this famous quote from a popular business leader in the USA in which he once said “a business plan is a piece of document which doesn’t replace your own knowledge of how to succeed in business”. The takeaway here is that you can succeed in business without a written business plan. This must tempt you to say a business plan is overrated and you may be right about this but it depends on some factors. The truth is you may or may not require a written business plan to succeed in business. Let us use a few examples to get at this question.

Imagine anyone who is successful in business today, let’s say a supermarket/grocery store business owner (with very little formal education) who started his/her business from scratch and has grown it into a respectable, profitable venture without ever consulting a business plan to guide him/her, you may conclude that you don’t really need a written business plan to succeed. But that is only true in that particular example and similar cases. 

Let us see another example. If you are about to start a Farming business in Nigeria and pondered on whether you need a business plan or not you may say definitely not, after all there are illiterate farmers who are making a lot of money from farming, did they read any business plan to succeed? But one question to counter this, what percentage of illiterate farmers is successful in business? Another question: what percentage of educated farmers are successful business people? You will likely discover that the educated segment tend to do better.

In the highly competitive newspaper business in Nigeria all existing players have business and strategy plans which they regularly refer to. This is because even with your thorough business knowledge the market is changing constantly and a strategic plan on how to succeed in maintaining or expanding your market share can only best be captured in a written document, what are the odds that you will succeed in this niche without a business plan?

Therefore as you can see the question of whether or not you need a business plan to succeed in business does not offer a straight forward answer because there are too many unpredictable situations that will make one answer seem like the wrong one.

When you start a business that you have a lot of knowledge about it terms of what the customers really want and how best to serve them, who to employ, what kind of business model to run etc you don’t really need a written business plan to succeed – if it is a small business and the market is not saturated. But what happens when the business is highly competitive and technical? 

Your business knowledge alone will not fly for your business. There are success factors which you know about (in your head but not in a written document) to guide you in making the right decisions and plan how to position your products/services in the market. But there are external factors which you don’t control that can affect the success of your business. How will you handle these factors? What’s worse is if you are even ignorant of some or all of these factors.

Once again do you really need a business plan?
The answer to this question can best be answered this way - if you are a sound business manager but don’t have enough market and technical knowledge about a particular type of business you want to venture into then you need a written business plan. If you know a business very well but you discover you have a lot of marketing issues to deal with and need to properly define your organizational setup and functions you definitely need a business plan. 

On the other hand if you are an encyclopedia when it comes to your type of business and can write books on it, you not only don’t require a business plan but you can actually become a consultant in that business itself. 

If you require a business plan for your business success and want it professionally written for your unique business opportunity, you can call me on: 0803 206 4106 or email me: Paulonwueme@gmail.com