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Wage Slave Rebel Dispatch
How to Succeed Online without a Business Plan
Although I had been self-employed and freelancing since 2007, it wasn’t until January of 2009 that I legally founded my first company. It wasn’t that I hadn’t thought of doing it before… I had. What kept me from it was how complicated every business book makes it sound.
I was reading books like The Six-Week Startup or Small Businesses for Dummies or The Idiot’s Guide to Home-Based Businesses. At the time, I thought I was getting a good, solid business education by reading these books.
In actuality, though, these books were nothing more than hinderances to my aspirations. They gave out truly one-size-fits-all advice about business, as if just because it works for the well-established McDonalds it will work for a newly-minted one-man web design operation.
The worst piece of advice these books gave me? Write a business plan.
Business plans are bullshit for aspiring online entrepreneurs, and I’ll tell you why.
They Delay Action
Speaking from personal experience, it is overwhelming to think you’re required to write a business plan when you get started. You probably don’t have much (if any) experience in owning or operating a business. You’ve probably never written a plan before. You aren’t even 100% clear on why it’s necessary.
They tell you that you need to do complicated and detailed market research, but they don’t tell you how to go about it. You’re supposed to collect this number or that number, but you have no idea where these numbers come from.
Your lack of knowledge in this area can really put a damper on your entrepreneurial dreams. That’s a lot to do just to get started. I put it off for months and months just because I wanted to avoid having to wade through a plan writing process.
Planning is Guessing
As David Heinemeier Hansson and Jason Fried of 37signals would say, planning is guessing. If you’re just starting out on the web, you can’t plan for anything. You have no record to pull from, no way to estimate numbers or to guess sales. You don’t know which kind of marketing has proven effective and which hasn’t.
A brand new online entrepreneur — especially those attempting to reach untapped markets — has no way of knowing what to expect. This makes writing a business plan a huge waste of time. It’s much better to just get a start on a vague notion of a business rather than spend hours and hours fabricating unproven forecasts.
It Can Lock You Into Failure
The web evolves and it evolves quickly. This requires a certain kind of agility on the part of online entrepreneurs. From experience, I know that 95% of the time you’ll start out in the wrong place with the wrong service targeting the wrong people, but overtime you’ll be able to narrow everything down to what works. You just have to be able to change direction.
If you waste weeks creating a business plan, you’ll likely give it much more weight than you should. You’ll stick with broken bullshit plans a lot longer than necessary. If you have a rigid plan that you attempt to follow religiously, you won’t be able to change directions quickly enough. Anyone can succeed on the internet if they can manage to flow and evolve with current trends.
The Solution is Simplicity
You don’t need to write a huge formal business plan. While launching Idea Anarchy, we created very informal text files to plan out what we were doing. Most of these plans didn’t relate to exactly what we wanted to do, but what we wanted to feel when we were doing it. We wrote things like
- Help 3 people or businesses a month.
- Incorporate as much open source software as possible into what we’re doing.
- Have fun.
As far as actual business goals went, we kept it pretty vague. We knew we wanted to do something with web design and consulting. That was it. That’s where it started. Specific goals aren’t helpful because you never know where you’ll actually be needed.
Create a vague strategy for your business, just one sentence to a couple paragraphs about what exactly it is you plan on doing. In the beginning, go back and revise that every week taking into account what you’ve learned. Eventually you’ll be able to narrow down exactly who your targeting and what services you offer.
You can’t fail if you keep it simple and stay flexible.
Photo by Hamed Saber
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I like this! I feel like I’m allergic to business plans.. like you I want to get on and take action. I am sure they can be useful sometimes but I agree that they can become a way of putting off the real work that needs to be done. Jen
Yeah definitely. Especially with a new/online business. For well-established, brick and mortar type businesses I can definitely see a business work coming in handy. For people who want investors, too. But for most online small businesses, I don’t see a plan being particularly useful until after they find a stable niche and figure out what service or product they’ll offer.
I definitely agree with this. I have created business plans in the past. I found them to largely be a total waste of time in most applications. But for the way the world works now? You are doing it right.
Yeah, based on what we’ve experienced in the last few months at Idea Anarchy, I’m convinced that this is the way to go with online business. It’s not about creating monolithic, rigid plans, but keeping it simple to ensure agility. It’s always good to get some confirmation on this from someone more experienced than myself.
They do have their place for some styles of business like you mentioned above. But for this type of space? Not at all worth the trouble. Everything you said was spot-on.
[...] I wrote that business plans are useless for online entrepreneurs and this is why. At the core of nearly every online business is a certain [...]
I wish I had this advice when I was consulting with a client about a restaurant/lounge acquisition last year. We agonized over a business plan for weeks (I’m terrible at the formalities of business).
We finally realized that we were just putting down make believe numbers on a fancy spreadsheet to impress investors. All we really wanted was for them to feel what we were trying to do and be willing to invest their hard earned dollars in a business that they believed in.
We didn’t need a bunch of made up numbers on a piece of paper to do that.
We trashed the business plan and instead wrote just a few pages focusing almost entirely on the vision of the restaurant. We walked the investors through our dream so they could began to feel like they were part of it. We invited them in on the busiest nights to impress them and give them the VIP treatment that comes with being a parter in the hottest lounge in town.
We didn’t sell them bullshit numbers, we sold them the experience.
Going forward, I can’t ever see myself writing out more than an outline for a business plan. Everything else, is pure guess work and like JD said, and this is my favorite part of this article, “A business plan can lock you into failure”. This to me, is the most insidious reason of all.
~Mike
37signals has it write. Planning is all-too-often guessing.
[...] How To Succeed Online Without a Business Plan over at Wage Slave Rebel [...]
This is one of the coolest layouts I’ve seen on a blog before. I agree with you about the solution being simplicity. The more simple and funw e can have doing what we do, the better the results, enjoying the process in the moment is key. Awesome post.