One thing that Baskerville does that is quite interesting is he refutes the idea that traditional business plans are good. In fact, he completely disagrees with a traditional business plan for today’s entreprenuers. The following are his reasons for not going with a traditional, run-of-the-mill business plan:

You can’t research new – The foundation stone for the traditional business plan is market research but most new opportunities for entrepreneurs are created in worlds characterised by great turbulence and considerable change. Consequently, it is extremely difficult to do business planning research on fast changing and evolving markets. There is just not any meaningful data in these markets which leads entrepreneurs to value the ‘trial and error’ (effectual) approach far more than the goal, research and analysis approach required of a traditional written business plan.

Change is inevitable – Experienced entrepreneurs know and accept that entrepreneurial business enterprises change and morph substantially in the foundation stages until they eventually settle on their sustainable growth path. They know and accept that a percentage of their plan will not work but it is impossible for them to identify in the planning phase which parts these will be. They know that there are just too many variables in resources, market acceptances, product developments and the entrepreneur themselves to predict meaningfully in detail over the traditional 3-5 year business plan. Entrepreneurs rely more on their ability to adapt to the changing environment as it evolves than carrying out the detailed instructions of a plan fundamentally created in ignorance.

Windows of opportunity close quickly – Entrepreneurs know better than most that timing is everything. All opportunities have a trigger point where action and commitment is required for that opportunity to be exploited. They know that ‘windows of opportunity’ are fleeting and require timely action or they can be lost forever. They believe that the cost of devoting scarce resources to researching and writing a traditional business plan is greater than the any benefit received, particularly if a ‘first mover advantage’ in the marketplace is lost due to this usually 3-6month delay.

The plan is already in play – Over 70% of successful entrepreneurial enterprises are started by current domain experts who have directly experienced the pain of a particular problem for which they have come up with a solution. This experience usually occurred while working for someone else or with a previous employer. These entrepreneurs question the need or value of writing a traditional business plan and are more likely to use their insider knowledge and experience and strategic alliances to firstly evaluate the opportunity and then to take it to market via their highly accessible distribution channels.

Planning tools need not be so ridgid – The traditional business plan presents as a ‘one size fits all’. How many entrepreneurs have struggled with the templates asking question about the past performance of the business or the current status in terms of operations. The traditional business plan has a bias towards an existing business going forward and is not well structured for an ‘idea whoes time has come’, as it is for most entrepreneurs.

Getting it wrong is no great loss – The advent of the internet as a means of business entry has made the cost of being wrong almost negligible. Through the medium of eBay, on-line marketing and the like, products and services can be tried and tested in the ‘real world’ prior to any significant commitment of resources. This allows for the process of modification and adaptation of the business model to meet the market needs ‘on the fly’ and so creates a far more commercially proven business plan (proof of concept) than the traditional generally untested written ones. These entrepreneurs focus on an affordable loss approach rather than get carried away by the ‘blue sky’ estimates of traditional business plans.

To continue reading more about how to write a business plan, please visit the original article posted by Peter himself.