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(In response to Ron’s post “Business Planning Is Pointless”)

Dear Ron,

Despite our longstanding friendship and work together as co-authors, I must weigh in with Alan Gleeson on this topic and argue (mostly) against you (I always did this anyway, so what’s new!).

I agree that it is increasingly difficult to predict the future, to know where opportunities, challenges or threats will come from, and to determine how best to move one’s company forward.
But that doesn’t mean that planning is pointless – as Alan points, rather the reverse is true – more planning is needed.

My experience is that most entrepreneurs find writing a business plan to be one of the hardest things they have to do in the journey of starting a business – and so they avoid it for as long as possible, until it becomes absolutely inescapable and incredibly urgent. And then the resulting pressure is used as the excuse for a poor quality output.

And, yes, there is a skill in writing a business plan – in communicating in this very rigid format – that most entrepreneurs lack, not having had previous experience of this kind of communication.

But the real, deep down, core reason that entrepreneurs have problems in writing a business plan is that they haven’t done enough thinking and planning to be able to write anything down – let alone a complete business plan!

And that’s why our books focus on a step-by-step approach. I always likened our approach to business planning to “painting by numbers” – the result might not be beautiful or win any prizes but, by colouring within the lines, you end up with something recognisable. If you are an artist, with the special skills of a Picasso or Mozart, then you don’t need lessons or a step-by-step approach. Sadly, most of us are not artists.

Tim Berry, founder of Palo Alto Software (Alan’s company), once said: “Business plan is a verb”. Note “business plan”, not the expected “business planning”.

I agree with your call for action, for immediate short-term movement – there’s far too much procrastination among would-be entrepreneurs, who sometimes wait for other people to shoulder the load for them and pull them through to success (this is a separate rant: I think we have replaced a grants-dependency with a permission-dependency). But movement in which direction? How far? Why? At the cost of what resources? Which will be acquired from where? With what result? These are the questions that business planning tries to answer.

And just because we are not good at (or, dare I say it, too lazy to do) the work involved in business planning is not a reason for substituting immediate action for business planning. All that does is provide a smokescreen of apparent activity.

I give the last word to my pension broker, Ted Dwyer of City Life in Cork: “The main advantage of not planning is that failure comes as a complete surprise, and is not preceded by ay period of anxiety or worry”.

Post by Brian O’Kane, Managing director OAK TREE PRESS

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10 Responses to WHY BUSINESS PLANNING IS NOT POINTLESS (a second opinion)

  1. Ron Immink June 5, 2012 at 4:32 pm #

    Dear Brian,

    Thanks for taking the time to respond. I will get back to you. I am not disagreeing with planning, I am questioning the format and method. To be continued…..

    • Brian Okane June 7, 2012 at 10:31 am #

      Agree that format and method need fixing to avoid Brian Andrews’ “wedding album” result (love the term – thanks, Brian) – keep space open, more talking & thinking needed!

  2. Brian andrews June 6, 2012 at 9:41 am #

    Ron, Brian,
    Business planning is essential; it gives you a tangible target/path to follow.
    Those that create them, must think about the requirements of the business,
    financials, marketing, etc, it makes you consider and pause whilst creating a
    business plan, you don’t rush head long into business, akin to the charge of
    the light brigade. As with Ron, the format is of business plans is where this discussion lies, they are stale, and rarely reviewed once created, ‘the wedding album
    effect’. Business Plans are tried, trusted and work satisfactorily, but are
    stale in their originality.


  3. Gerard Brandon June 6, 2012 at 2:05 pm #

    The short answer is “It depends”

    What I mean is that it depends on what you are setting out to do. Start ups by their very nature are bootstrap lean operations with few moving parts (or participants) and so the need to define to the nth degree of what you are setting out to do can be non-productive if things change so much in the first week.

    However the bigger the idea, the more people or parts involved, the more investment required it seems that a coherent model (not necessarily 50 page booklet) should be mapped out to ensure that each and everyone on board is going in the right direction.

    Who and what are you writing a business plan for in the first place? Is it to justify your idea to yourself (which you can find for and against starting up) or do you need buy in from those same people and investors. Why else would they invest their time/money if you have not expressed your great idea in a simple way their understand and you give them the road map of where you are going and why they should follow you.

    Why should investors hand over their money to you? Why should employees or new executive members of your team (that you hope to recruit) want to join in your great venture? Why should you be the one to lead it? Why is your venture likely to be more successful than your competitors? 

    There are 100 other ‘why’ questions that a business plan will answer and give credibility to you and comfort to investors knowing that you have done this before, or you have hired people who have done this before.

    What about the risks? Are you prepared to wait for someone to ask you what the risks are? Would it not be better to let them know in advance what the risks are and what you intend to do about them?

    It’s called a Business Plan principally because “Wing It” just does not sound like a good business model. But then what do I know?

  4. Camillus O'Brien June 8, 2012 at 9:46 am #

    Business planning? To paraphrase Shakspeare, ‘to plan or not to plan that is the question’. 
    If its really just about format, I wondering how Henry Ford, Bill Gates, Steve Jobs, Richard Branson, Andrew Carnegie ‘wrote’ their plans. Do Entrepreneurs, when they start out think to themselves that 
    “Hey I’ve got to write this really super business plan, so that the Accountants, Bankers, Investors will think that I’m really savvy business person and give me the backing and money I need or do they get an idea, and MAKE it happen.Would we have these great enterprises if Entrepreneurs had to write these TOMES? It would be interesting to see what is the History of Business Plans. Are  they just a creation of the Management Gurus as an attempt to explain why ALL these Entrepreneurial businesses have succeeded and when they have failed, to blame it on the lack of a business plan?All Entrepreneurs have a Vision of what they want to achieve and then they go about making it happen. So does the plan come first or the action?I say let the SBC Community decide. Is it ACTION or PLANNING that makes business a success?

  5. Ron Immink June 13, 2012 at 9:54 pm # has joined teh debate;

  6. Macsfieldimages June 15, 2012 at 12:04 pm #

    Whilst I agree that ‘some’ planning is required, history has taught us that it can only be a very rough “short-term guide” or “target” to try and achieve. However, there seems to be a feverish requirement, particularly from banks, for a “business plan” (now there’s a joke – banks and business plans) often projected over a 5 year period. I wonder what value the Banks place on a business plan, which was submitted in 2007? Were they able to project a global economic crash? If not, why not? When a business is built on the premise of “If'”, “maybe”, or “possibly” then the paper on which the plan has been written has more value than the ‘plan’. Do ‘business plans’ work – ask those who drew up one from 2003 – 2007. Ask the Banks, who are so insistent on these “plans” to explain what happened to their plan and projections – then perhaps, the value of a “business plan” may be ascertained.

  7. shavas June 16, 2012 at 12:32 am #

    There is a middle ground here … which is to be clear on where you need planning and to do just enough on a just in time basis.  Too many people talk about the PLAN as if there is one form, one purpose, one process for planning.  

    Startup businesses planning needs can be wildly different:  Building a new product?  You might only need to know about how much money you need to get it launched .. the Steve Jobs model.  Building a distribution business or anything requiring substantial upfront investment?  You’d better have a pretty good operations plan including detailed cost assumptions.  

    Businesses that have already launched have different needs. I would submit that, in general, planning for smaller business should focus on only the most critical issues your company has as they come up, that it should not be ‘annual’ but should be ongoing, and that deliverables should be as small as humanly possible.

    Need to sell to investors?  That isn’t a plan .. that’s a sales document for your company and there is a wild difference.  It often walks like a plan and talks like a plan .. but it’s a sales presentation.  Most investors understand that.  

    Hard to write a book about planning in a comment here .. but I struggle with anyone who believes that planning by numbers on an ‘all in’ basis has much value with small enterprises .. or large.

  8. Ron Immink June 27, 2012 at 12:15 pm #

    Dear Brian and Alan (and other commentators),I had the pleasure of being at the Leancamp organised by the Innovation Academy in UCD and Mary and Raomal of Thousandseeds. One of the subjects discussed was the business plan and whether it was pointless.Brian Caulfield was very clear. “Not having a business plan is stupid” He also said that 80 page business plans are stupid too. Particularly, if the 80 pages are used as the documents to convince a venture capitalist. Shay Garvey was just as adamant; “excuse for lazy thinking” and an excuse by entrepreneur not to be held accountable.The discussion moved on to presentation versus depth (and I think some of the formulaic approaches don’t do the business plan any service) and business planning as part of the hygiene factors (you have to have one), but not necessarily the way to communicate an opportunity.Financial planning was seen as crucial and particularly the unit economics and the cash waterfall at exit.The question was asked if the business model canvas was credible alternative (I think it is/thought it was).Response; “It is about the story and the journey”. Which makes both the business plan and the business model canvass unsuitable? Deep sigh…… still confused. 

  9. AdmorTony July 8, 2012 at 1:51 pm #

    This is my view:


    (1) Business Owners (and generally their Advisers such as Accountants) do not understand the ‘Business Plan’ as a document (not a verb) in relation to its purpose, its benefits or its construction. 

    Having a written Business Plan is not necessary to achieve a successful

    Funders, especially Banks and Grant Organisations expect them.

    Having reviewed many bank and other funding applications, most are not
    supported by Business Plans.  Of those that are, the majority of the plans
    are low quality – poorly structured, badly thought through, basic errors,
    inconsistencies and omissions, weak grammar, unrealistic financials and
    fundamentally have no clear evidence of understanding and managing the risks and
    showing repayment capacity.  This inability to effectively prove ‘business
    viability’ is despite the proliferation of templates, guidance notes and
    samples available.  There are of course exceptions.

    In summary, I believe that in the current tight funding environment we need
    more Business Plans (and by default Business Planning), not less – they just
    need to be better quality.  Further, the discipline of producing a
    Business Plan (and tracking / reviewing it regularly) while not absolutely
    necessary, would greatly benefit most businesses, whether or not they need


    Finally, I think weak Business Planning and poor or the total lack of a
    quality Business Plan, can often be attributed to an unclear Business Model.
     Get the Business Model right and Business Owners should be able to plan
    around this to improve the profitability of their start-up or existing



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