Whether you are a business guru or an investor, business plans are considered an essential part of starting a new business. For business owners and other stakeholders, it acts as a manual that can be used to ensure business success. Similarly, a business plan can be a major drawback to a business's growth for the fact that it does not offer a guarantee that a business could grow and help you achieve the investment you are looking for.
Small business owners now know a pandemic is one of the external factors that can hinder the potential advantages of planning. Political unrest, strikes, and natural disasters are other factors. However, if you combine all these factors, you will realize that problems add up quickly with internal factors that are influenced by business plans
In one interview Elon Musk, a business magnet and investor was asked to give an insight on how he generated a business plan for his successful businesses including Tesla Motors but to everyone's surprise, he said I don't really have a business plan, I had a business plan, way back in the zip two days but these things are just always wrong, so I don't bother with plans after that"
Indeed business plans do not always work, 95% of them fail in the first 5 years according to Robert Kiyosaki. Data from the Bureau of Labor Statistics (BLS) shows that approximately 20% of new businesses fail during the first two years of being open. We can round all the reasons up and find out that the core cause of it emanates from how the business was planned from its starting point.
Ultimately, a business plan does not offer room for business flexibility, a business owner is always expected to adhere to it and never deviate. In so doing, it leads to missing opportunities and the downfall of the business in general.
With no room for flexibility and an inability to deviate to other means that could help a business to grow, a business plan breeds a false sense of security and tunnel vision, stemming from putting too much stock in the plan and not seeing or reacting to changing conditions. This in turn discourages creativity and innovation.
While it is true that small businesses do exist and grow with business plans in place, it is also worthy to note that business plans are time-consuming, A lot of time can be wasted analyzing performance. It is easy to become too focused on the goals and objectives in your business plan especially when you are not achieving them. By spending too much time analyzing past performance and looking back, you may miss other ways to push the business further.
Furthermore, the unpredictability of market conditions makes a business plan just a piece of paper for funding purposes. We all know how quickly market conditions change. Unfortunately, certain elements in your business plan may have lost relevance by the time you are ready to launch your small business.
Without an actionable road map, a business plan can never offer room for small business growth. Effective business planning is comprehensive and adaptable, for it to work every business owner must have a business plan that critically defines its purpose with room for adjustments
