The business plan has long been a staple for anyone hoping to start a business.
This lengthy document filled with charts, graphs and detailed financial projections is an excellent way for entrepreneurs to familiarize themselves with their industry, think through their business processes, and clarify their ideas and assumptions. And, it’s typically the first thing potential investors ask to see.
However, a paradigm shift in the business-planning community is under way.
Doug Erwin, vice president of entrepreneurial development for the Economic Development Authority of Western Nevada, said the entrepreneurial community is moving away from the information-rich business plan toward leaner models more focused on real-world validation.
As he puts it, “People have shifted from a model of “tell me about it” to “prove it.”
“There’s nothing wrong with planning,” Erwin said. “The problem is that the second you write the business plan, it’s effectively out of date. The likelihood of you writing that plan and executing it as written is essentially zero.”
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