The Tale of Two Investors: The Business Plan Part Deux

In my last post I discussed the importance of a business plan from two expert angles, Kevin Ryan founder of Gilt Groupe and Daymond John founder of FUBU.  I mentioned that I found it ironic that two different men with two entirely different backgrounds both became financially successful using different methodologies they learned from their education or lack there of. As they progress in the business world their standpoints or views on writing and reviewing business plans changed. I stated that I had agreed with their take and opinions but it seems it is best to find some sort of middle ground. I came down to the conclusion that it is best to write up a business plan but also it is best to know your market.

Unlike Daymond, Kevin feels that a business plan is not needed if you know the market or business exceptionally well.  Moreover, Daymond’s success was not necessarily founded on a business plan but on the execution of an idea. That execution of an idea is what Kevin feels is far more important than a business plan.  In the business fashion retail or fashion design, entrepreneur decided to create the product first then sell it. They establish the business fast without planning out the details with a business plan. They have a concept and an idea they are trying to bring to fruition. Some are successful most are not. I believe writing a business plan is purely for direction and organization. I furthered state that a business plan is for your investor. A document presented to a potential investor to show him or her how serious you are. However, if I had the capital or income to a fund a business idea or venture there is strong possibility I would not create a business plan if I knew my market or business well which I feel that I do know the retail apparel industry fairly well. Nevertheless, I believe in a plan of action and back up plan. Plus, I know the blueprint of a business plan is not necessarily set in stone. 

My knowledge or experience in a particular market and the need of funding for a business venture or idea will dictate whether or not I feel the need to write a business plan. I feel Kevin Ryan and Daymond John started their business ventures without initially writing up a business plan. Once they became investors themselves they expect a level of seriousness and organization from entrepreneurs who want them to invest in their idea. Therefore, I believe it is important for me to write up a business plan because I want to be viewed, as a serious entrepreneur and also my educational background would warrant some structure. The only thing I need to develop or change is my execution of an idea.