A well-crafted business plan is far more than just a written document-- it forms the cornerstone of your business. It can help you grow more effectively, with greater focus and reduced risk. It is also a useful marketing tool for raising capital or recruiting partners, advisors, or key hires.
Most importantly, it is the *process* of developing your plan that provides great value. By applying a structured approach, you will know the market, your customers , and the competition, and you will have real insight into the levers that drive profitability in your business.
Here is a basic outline to get you started. Contact VentureArchetypes.com for more details:
1. Market Opportunity
+Establishes the case for "why the world needs your solution"
+Provides market size, growth, trends, and customer information
2. Company and Products
+Explains what your product does and how it meets market needs
+Details your business model today and in the future
3. Operations and Development
+Lays out launch, growth, and expansion strategies and tactics
+Details what you will do & when, given the limited resources (human & financial capital) of a startup
4. Existing Relationships and Future Alliances and Partnerships
+Discusses who will help you succeed and why they will do so
5. Marketing, Sales, and Distribution
+Demonstrates how you will gain awareness, close deals, and get product to market
+Describes the competitive environment as well as your advantages and differentiation
7. Management & Advisors
+Background on who is running the show; Demonstrates credibility
+Shows how you will make money, your funding needs and uses, and how much of a return you will generate for investors.
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Step 1: Get Organized, Get Focused, Get StartedThe first step is to get your team (and yourself) committed to building a plan. It is often useful to have a dedicated time set aside each week to work on the plan, with goals and deadlines to hit. Building a solid plan takes time and effort; know this upfront. At each meeting (what we call "Strategy Sessions"), you will pull together the research, documents, and insights that are often scattered among various team members. You will brainstorm, analyze, discuss and debate. Importantly, you will also commit to putting things down on paper-- for example, what is your initial market focus (at launch), and what are the secondary and tertiary markets you will pursue? How much will you charge and why? In this manner, you will gain consensus and the plan will begin to take shape. It should be treated as a living document, but also used to narrow the scope and keep you focused on things that matter. StartupVentureToolbox has a variety of great tools to get you going.
Step 2: Revise, Refine, RepeatThe best plans are not done overnight, and they do not sit on a shelf. Rather, the best plans-- the ones that ultimately help guide your business to success-- are constantly massaged, enhanced, revised, and reworked. To borrow a cliche, "the journey is the destination." Once you have a solid draft, let it ferment for a week, then review it with fresh (and critical) eyes. In addition, you should aim to hone your plan as new information becomes available, and as you test our your original assumptions in the market. To encourage more-frequent revisions, you should use a system for document sharing and workflow management that is easy to use. Google's Apps are good, and many companies use a Wiki or a shared online drive. Another solid alternative is Zoho.
Step 3: Get Help, Gain PerspectiveMany startup teams-- and solo founders in particular-- suffer from "forest for the trees" syndrome, meaning they focus too much on the minutiae of their business, and have a hard time seeing how their business fits into the broader competitive and market landscape. The remedy is to get external advice on your business plan and strategy from trusted third parties. Ideally, such parties know your market and business intimately, and have deep experience within the startup world (which is quite different from experience at a F500 company). Advisors may include VCs, business attorneys, industry analysts, and founders of companies who have "been there, done that." (Side note: for folks who will provide value over the long-term, you may consider structuring a formal Advisory Board). Naturally, consultants who focus on solving startup business problems can be very valuable. Shameless plug alert-- this is our role at VentureArchetypes. Contact us to learn how we can help.
- Commit to building a business plan. The return you will gain-- in focus, investor preparation, and business insight-- will be many times the effort invested.
- Treat your plan as a living document. It will help keep you on track, and serve as a means to continually hone your business model.
- Get help, advice, and feedback. Input from professional advisors translates into a better business plan-- and ultimately, a more successful business.