The Myths of Business Plan & Business Model By Sayo Peter Akinbowaleadmin
It’s weekend and I’m loving it. How has your Friday been?
This is another long post but, if you gained nothing after reading it let me know how much data you use to read it, I’ll pay.
If you’ve not read my first post Business Plan Versus Business Model, I’ll encourage you to do so now.
In the first post, we established the relationships between these two (2) business tools and in today’s post I’m pointing you to some myths around them too. But, let me highlight more differences first…
Years back, when I was still very young, I’d go to my Dad’s workshop during holidays to play and also learn his trade. Beside his workshop was a furniture workshop and I used to go there to make some troubles too. I’d seen the carpenter used various tools for his crafts, one of which was hammer.
He uses two kinds of hammer and I wonder why. One day, out of curiosity I asked him “what is the difference between these hammers” and his response startled me as a young child.
He said “This small hammer is for soft nails like tack, while the big one is for strong nails like this tornado” he points at it.
***A tack is a small, sharp broad-headed nail usually used for fastening fabrics or light materials on soft wood. It’s like a pin and not strong at all…
While tornado nails on the other hand is a very strong nail that is used in construction sites where they work on hard woods and bricks…
He continued by saying… “If I use the small hammer on tornado it’ll put more strain on my arm and may yet not drive the nail through, but with this big hammer, I can drive the nail through the wood more conveniently. If I otherwise use the big hammer for the tacks, because of it’s small size and softness, I could hit my fingers or break the nail or damage the wood due to the force”.
He summarized it this way “Hammers are used to drive nails into woods but the difference is in the scope of work”.
Similarly, business plan and business model are two (2) unique tools for business growth and success and the difference is in their details. While one points you to money (Revenue generation) the other describes the future and document processes as business evolves reducing the risk of failure.
***NOTE – Business model is about the soft work and business plan is about the hard work. Little wonder entrepreneurs are going gaga about the (soft work) and others contract business plan writing (hard work) to gurus. In business, making money isn’t the hard part, keeping it coming and increasing time to time is the real work.***
Nuff said about the differences, let’s demystify some myths around these business tools…
THE MYTH OF BUSINESS PLAN
MYTH – You Need To Have A Business Plan Before You Start A Business…
This is one myth that confused every wanna-be entrepreneur. Most of them, when asked whether they have one, cast a guilty look on their shoes like they stepped on some shit. I don’t like that feeling.
If that’s you, fret no more and listen up…
A business does not have to have a business plan to succeed. What you need is a very clear picture of what role your business is going to play in the industry. In order for a business plan to work and be truly useful, it must be based on your business vision. You need to be clear about it, test it and gain tractions before ever thinking of writing one.
Don’t get me wrong. I’m all for having a business plan that is pumped by actions. I’m just not a big fan of writing one because it’s what every successful business do…
Writing a formal business plan when you’re yet just getting started invites the paralysis of analysis. It distracts you from slaying dragons and thinking big thoughts. And it’s largely a waste of time if based on your head-knowledge.
Should you think through business planning issues such as how you’re going to move from thought to action, how you’re going to find customers and how you’re going to pay the bills? Absolutely.
Should you agonize over writing everything down in a format that some gurus says is the way to do it? Unless you’re entering a business plan competition, no. Your time would be better spent out on the street, learning all you can from potential customers.
NOTE: While it is best written down, it could also occupy a space in you cerebrum
Great business plans may earn you an ‘A’ in the competition, but in real life you only get A’s for achievement. So stop wasting your startup fund on writing one… Go out there and slay something.
THE MYTH OF BUSINESS MODEL
MYTH – Business Model Is About The Money And A Fast Alternative To Business Plan…
No doubt, business model concept is dope and might seem like the fastest alternative to writing a busines plan and making money. But while carrying your business model assumptions in your head, you need to beware of the reality distortion that plague entrepreneurs journey.
Here’s what I mean…
Business model may take few hours to complete and very easy to update, review, evaluate, and revise. The problem is in the way entrepreneurs distill the essence of their business in few words to fit into a one-page canvas without real life experience.
Let me be brutally honest with you…
From my experience of working with entrepreneurs using the business model canvas (BMC), if one would consider the quality of thoughts that should go into the one-page canvas, coming up with a sustainable model eventually takes a while.
Another myth that makes people gravitate towards using business model is the systematic way it shows the revenue generation path. But that simply won’t give you the results you want or need if you aren’t committed to working it.
A business model without work, enthusiasm and purpose lacks the essential idea from which commitment, growth and the sense of personal achievement arise and flourish.
About the Author
Sayo Peter Akinbowale, create profitable business model, build functional sales system that scales financial performance.