Should you write a business plan – Part 1?
I read a lot of debate about whether the entrepreneur of a startup should spend the time to write a business plan or not. Well, the answer is both yes and no. I hear the groans, but bear with me.
Before we go into the reason for my answer, let’s consider what a business plan is for. It’s for 2 basic reasons; Reason one is to get your business idea down on paper, while reason two is to share your idea with people you’d like to involve in the project. KENOVA’s ideology involves a third reason that I will explain in Part 2 of this blog topic (see section One Page Business Plan strategy).
So why do I say “no” to the question? It's not the concept of a business plan that I'm saying 'no' to, but the traditional understanding of a business plan. That is to say, I’m saying no to the 50 pager, 3 month mammoth of a document explaining the value proposition, vision, mission, values, sales forecasts, marketing strategies, team members, financials, board members, pre-market research, competitive analysis, so on and so on. That sort of plan is reserved for merger and acquisition, securing business loans or venture capitalist.
In other words, yes, you must have a business plan, but there are different types or levels of plans for different audiences. If you’re the audience, a one page document is sufficient to get you started. This one pager will explain the idea, why you think it will make money, how it will make money and your next 5 action items to move your project along. You can add a vision and a mission if you like, but don’t spend more than 15 minutes, as they will change as your project develops and evolves. When it’s done, print it out and hang it near your work area so you see it daily.
If you wish to attract people to your project, you’ll want a plan that’s a little more fleshed out than the one pager and needs to clearly explain the problem you are solving, how you intend to solve it, the value proposition, who your customers will be, the channels to them, how you’re going to make money, what you expect the costs to be, your bio and your next 5 activities to keep the project moving forward. Please see my next posting "Should you write a business plan? – Part 2" for a discussion on the other level of business plans needed.
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