Conventional wisdom is that business plans are written documents. I disagree. Entrepreneurs should focus on their pitch decks, financial models, 1-pagers, and elevator pitches – and create written business plans only if demanded by prospective investors after several meetings.
1. Word docs are long, and few investors read them in their entirety.
2. They take far too long to write and update.
3. You can’t pitch from a Word doc.
4. If you are trying to persuade your audience, to invest for example, you can be far more persuasive by pitching in person. Also, you can be there to see how people are reacting, modify your pitch, address concerns, and get critical feedback for revising your pitch.
5. Printing and copying Word docs takes longer, costs more and kills more trees.
6. The only time you may truly need a business plan is if a venture capital firm or corporate investor gives you the thumbs up on your pitch, and is in late stages of closing a deal. If at that point it’s a matter of formality, write a plan then.
Guy Kawasaki, noted silicon valley entrepreneur and early stage investor, puts it this way: A good business plan is a detailed version of a pitch – as opposed to a pitch being a distilled version of a business plan. Your pitch is more important than your business plan, as it will determine whether you’re rejected or generate further interest. Few sophisticated investors will read a business plan as the first step… Frankly, it may not even be read. You will, however, get immediate reactions to your pitch.