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INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | | FEBRUARY 24, 2003 ENTREPRENEUR'S BYLINE By David E. Gumpert Burn Your Business Plan! [Page 2 of 2]
I came to realize then that in three potentially significant financing-related events for our company, namely seeking financing in 1995 and 1997, and then selling the company in 1999, a written business plan had been of absolutely no use to us. You might say, "Well, just having gone through the process of writing a plan probably helped you grow the business." I wish I could say that, but I have doubts about that as well. The written plans we put together assumed faster growth based on having received funding. The plan we actually followed was a slow-growth plan that wasn't part of our write-up. The realization about planning was especially important to me, since prior to launching NetMarquee, I had authored two widely read books about how to write a business plan: Business Plans That Win $$$: Lessons from the MIT Enterprise Forum (with Stanley Rich) and How to Really Create a Successful Business Plan. After we sold NetMarquee, I decided to revisit the whole subject of business planning. I spoke with entrepreneurs who had obtained financing, and I surveyed venture capitalists to learn the real role of business plans in raising money. I confirmed my experience as an entrepreneur. A lot of potentially deserving entrepreneurs never get their plans funded, and many others that do obtain funding actually do so without ever writing a business plan. ACT, DON'T PLAN. I decided to write a book challenging the preeminence of the written business plan, with the same title as this article: Burn Your Business Plan! What Investors Really Want from Entrepreneurs. It argues that entrepreneurs should focus their company-building efforts on such tasks as creating a Web site that communicates their business model, on obtaining publicity, keeping the finances under control, and making sales before thinking seriously about writing a business plan. According to the conventional wisdom, we're now in the third year of tough economic times. Business is quite difficult in many industries, and financing seems to be unavailable to young companies. Yet it's interesting to note that during the first three quarters of 2002, venture capitalists have invested nearly $17 billion, more than all of 1997, which at the time seemed like a great year. Increasingly, though, I am convinced that the key to the success of most young businesses is to ignore all the venture-capital statistics and admonitions to write business plans, and instead use all the creativity and diligence you can muster to tend to your business. Put another way, you should be doing, rather than writing about what you will do. David E. Gumpert is president of Gumpert Communications Inc., a firm based in Needham, Massachusetts that specializes in providing communications and consulting services to growing companies.
 Entrepreneur's Byline comes to BusinessWeek Online readers courtesy of EntreWorld.org, a resource for entrepreneurs that is sponsored by the nonprofit Ewing Marion Kauffman Foundation. Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | FEBRUARY |
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