When starting your own business a very important question to ask yourself is – how much should you plan?
Should you have an elaborate business plan, covering all major aspects of your new business? Or… Should you plan as you go?
This is not a simple question with definitive Yes or No answer. However, it is definitely a question to think about and worth asking before you start putting together your new business plan.
Planning Your First Steps
In theory, business plans are easy to write. When starting a new business it is also easy to think you know all about your business.
When you think you know everything, assumptions that are not tested in reality become part of your business plan. This is a big reason why a lot of business plans collapse when it comes to execution.
Our brain is not designed to work like a computer that can calculate all the possible implications for a given set of assumptions and estimates.
Rather, our brain is build to learn from experiences. The more real world experiences we have the more our brain is able to plan and predict results better.
The Lean Canvas Approach
Instead of a detailed business plan, I recommend starting with a one-page document that lists the primary aspects of your new business. This is a simplified approach and works well as a step-1 plan for any new business.
Example of a Completed Lean Canvas
This one page plan saves you previous time. It gives you a bird’s-eye view of all the different aspects, assumptions, and to-dos for your new business.
Once you have your business details outlined on the lean canvas it is time to start testing them. Your step-2 plan would be to:
- Test your assumptions
- Survey your potential clients/consumers
- Plan to build a MVP (Minimum viable product)
- Test if the product can generate revenue
Before you build a detailed business plan, it is essential that you test out assumptions in the real world. This will ensure that the business plan you write has all possibilities of success.
Planning and Stepping Approach
The planning and stepping method involves building small plans and testing the results, then using the results to build the next small plan.
It is over-hyped that businesses grow in leaps. Majority of business success comes from building it one-step at the time.
Take the best logical step and move forward, don’t get caught up being a perfectionist or try to over analyze/estimate all the possible implications of your next step. Just figure out what the next logical step would be to move your business forward and start doing that step.
If your step is successful, take the next logical step – if not then you have given your brain an experience that will help you plan the next steps better.
As you start building your experiences around what works and what does not, your business planning will naturally start becoming more fact based and less assumptions based.
Fear and Failure
While the planning and stepping approach is the best way to learn, test and improve your business in the real world. It is also full of fears and failures.
Planning makes us feel safe and less fearful. Our brain has a natural tendency to plan 12-15 steps ahead of what we already know – mostly based on assumptions and estimates.
To implement the planning and stepping approach, you need to train your brain to plan less. Just plan only the next 2 or 3 steps and avoid the urge to plan beyond. This of course will result in you feeling more fearful of failure – but that is okay.
Fear, Failure, Courage and Success are part of the Planning and Stepping approach. Starting your own business requires you to face all these facets.
So, here is the summarized answer for how much you should plan.
- Use Lean Canvas approach to build a one-page business plan (bird’s-eye view)
- Plan small next logical steps (testing assumptions and building facts)
- Avoid over planning (an attempt to avoid failure)
- Learn to step into the unknown (overcome fear)
The idea of doing things one-step at a time may not be revolutionary, but by using this approach, you will learn and grow a lot faster than having an elaborate business plan while starting your own business.
So, what is your next step? Go do it now!