Action Business Planning:
A Migration from Formal Business Plans

 

A formal business plan is often the first step in setting up new ventures, growing existing businesses, or making new products. A formal (classic) business plan generally consists of a document that summarizes the operational objectives and financial analysis of a business and contains detailed plans and budgets that show how the business' objectives are to be realized. The conventional wisdom regarding most formal business plans includes the assumption that new businesses should be planned in detail prior to startup and that those details will serve as a harbinger of success. A comparative case study of many successful businesses, however, demonstrates that detailed formal business plans are not always a prerequisite for success. The importance of formal business plans in the growth and success of new ventures has been questioned in many other studies. "Action business planning" offers an alternative to the formal business plan. It assists entrepreneurs in developing ventures beyond the writing of formal, linear business plans.