Generative AI has exploded over the past year, with countless tools emerging almost daily, promising to transform how we work and live. 

One surprising latecomer has been AI tools focused on business planning. But, over the last few months, over a dozen AI business plan generators and assistants have hit the market, with more on the way.

On the surface, that may seem like a good thing. Business planning is often viewed as a complicated and time-consuming hurdle to starting a business or getting a loan. These tools claim to simplify and accelerate business plan writing to get you into your business faster and sometimes do not require any manual involvement.

But is that really a good thing? Will having one of the current AI business plan generators create your plan set you up for success?

The Promise of AI in Business Planning

I’m not here to say that AI isn’t useful for business planning. It’s only going to get better and the reality is more and more business owners will find value in using AI, and for good reason. 

Even in their current state, most generative AI tools and plan generators provide the following benefits:

Quickly Converts Ideas into Polished Text 

It’s not uncommon to have vivid business ideas but struggle to articulate them. Generative AI is excellent at transforming disparate thoughts, bulleted lists, and scribbled notes into coherent and professional-sounding paragraphs.

Brainstorming and Generating New Ideas

The greatest benefit of AI is that it doesn’t get tired of being fed questions and spitting out ideas. This makes it the perfect partner for exploring areas of your business, like figuring out who your target market is, what your services could be, and even what expenses you may incur.

Helps Optimize Your Writing

You likely aren’t a trained writer, which is part of why writing a business plan can be so difficult. AI is excellent at enhancing the quality of your writing by fixing grammatical errors, improving sentence structure, and even helping rewrite sections to improve clarity and brevity.

Accessible and Cost-Effective

AI tools make business planning more accessible and potentially cost-effective for entrepreneurs with limited experience and budgets. Rather than paying for a professional writer or consultant or trying to become a planning expert on your own, using AI to help generate your plan can supplement this necessary expertise.

All of these benefits are very real. With AI, business owners can speed up the planning process, generate more valuable ideas, and even bridge their knowledge gap in some cases.

The Limitations of AI Business Plan Generators

However, AI is not perfect, and these benefits, especially with AI business plan generators, are not guaranteed. Here’s why:

Inconsistent Results

AI business plan generators vary greatly in quality. The best ones utilize fine-tuned prompts to produce valuable results, while others merely repackage basic AI models, leaving you with little control over the output. 

As with any AI tool, you get out what you put in. If you rely on a generator, you trust that the people who created it did the grunt work. Otherwise, it’s up to you to spend time testing and creating prompts with more general AI tools like ChatGPT until you start getting the results you want—eliminating all the time-saving benefits.

Inaccuracy and Incomplete Information

Generative AI tools still struggle to provide accurate statistics and market research data. Whether it’s due to training data being out of date or not being able to access specific resources—you simply cannot trust the references, sources, and numbers they produce. 

Not just because the information may be outdated but because it may be entirely made up. These tools often confidently “hallucinate” information, requiring you to spot-check everything they produce for accuracy. Even plan generators that claim to have AI-powered market research data need to be verified. If they do not provide the source or method behind the numbers, you really can’t trust them.

Lack of Creativity and Personalization 

Large Language Model (LLM) tools like ChatGPT or Gemini do not create anything new. They are trained on specific data, take that information, and use it to craft answers, ideas, and writing. 

This means AI tools just can’t capture the unique nuances of individual businesses. Each business has distinct characteristics, goals, and challenges that a one-size-fits-all AI solution cannot adequately address. 

So, even if you provide highly specific information about your business, there’s a good chance an AI business plan generator will produce a generic-sounding plan.

Over-reliance on Automation 

Ultimately, the biggest issue is that instant business plan generators take you out of the equation. You suddenly know less about your business and what is being written about it. 

While this may save you time and effort now, it will make your plan far less useful for starting and managing your business and especially for pursuing funding. Investors can smell an unprepared business owner from a mile away, and leaving it all to AI will make you incredibly unprepared. 

The Importance of Human Involvement in Business Planning

This should be your main takeaway—AI should not replace your involvement in the planning process. Because AI cannot replicate:

• Your Deep Understanding of the Business: You are the only one who knows your business as intimately as you do. Whether you are opening a convenience store or running a marketing agency, you are actively engaged in the planning process, you are better equipped to identify opportunities, mitigate risks, and make strategic decisions.
• Ability to Communicate with Stakeholders: Investors, lenders, and other parties are likely to trust and invest in a business when they see that the founder has a deep understanding of their business. This starts with the quality and depth of your business plan, which, when done correctly, demonstrates a commitment to the business’s success. It also enables you to confidently pitch, discuss, and defend the contents of your business plan.
• Accuracy and Relevance in Your Industry: While AI output has improved, these tools still struggle with accuracy and lack the nuance and experience you bring to the planning process. Only you can validate data, update information, and make necessary adjustments based on real-time insights and feedback.

Choose an AI-Integrated Business Planning Solution Instead

While AI business plan generators offer convenience, they often fail to provide the personalized, accurate, and strategic insights necessary for a successful business plan. 

You must take an active role in the planning process if you want to get real value from your business plan. So, if you do plan to use AI to help you write a business plan, carefully consider your options and lean toward using dedicated business planning software with AI integrated into its toolset. 

These AI business plan generators help alleviate some concerns around accuracy and consistency because they’re built into a tool designed to help you write a business plan. They’ll still help you generate sections of your business plan but don’t take you out of the equation.