business plan.docx - When Should Entrepreneurs Write Their Business Plans It pays to plan Entrepreneurs who write business plans are more likely to

business plan.docx - When Should Entrepreneurs Write Their...

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When Should Entrepreneurs Write Their Business Plans? It pays to plan. Entrepreneurs who write business plans are more likely to succeed, according to our research, described in an earlier piece for Harvard Business Review. But while this might tempt some entrepreneurs to make writing a plan their very first task, our subsequent studyshows that writing a plan first is a really bad idea. It is much better to wait, not to devote too much time to writing the plan, and, crucially, to synchronize the plan with other key startup activities.A startup business plan seems a good idea at the very start because it answers basic questions like “Where are we now?”, “Where do we want to get to?”, and “How are we going to get there?”. By detailing out how to orchestrate complex interdependencies such as customers, competitors, operations, logistics, marketing, and sales, writing a plan first appears to schedule out actions and strengthen the link between actions and performance for the new venture. And, as we mentioned, planning does have value. In our previous work, we looked at more than 1,000 start-ups, separated them into planners and non-planners, and found that entrepreneurs who plan are more likely to create a viable new venture.But the real key to succeeding in business is being flexible and responsive to opportunities. Entrepreneurs often have to pivot their business once it becomes clear that their original customer isnot the right customer, or when it turns out that their product or service fits better in an alternate market. Because of these realities, business plans written at the start end up nothing more than a fable. And writing a plan takes time – time that could be spent evaluating opportunities. Another danger lurks. A plan might just lock the entrepreneur into a false sense of security that prevents them from seeing the actual opportunity — rather than an imagined one.To provide startups with concrete and practical help, we went back to the Panel Study of Entrepreneurial Dynamics II’s data on 1,000 would-be U.S. entrepreneurs. Using these
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