As I scour the internet going through bunches of articles and blog posts, and as I read more and more business books looking for more advice and tips on launching startups and running them, one of the main questions that keeps coming to mind is that concerning the business plan.
On one side you have the people who tell you to forget about writing a business plan, and to invest that time into working on your startup, getting things off the ground and moving, and that your business plan will come easily to you later on when you’re well established.
On the other side, of course, are the people who think a business is not a business unless you seriously think about and formulate a business plan for it, and that it’s best done at the very beginning so that you know what your goals are, where you’re taking your startup and how you’re actually going to make money to keep it alive.
Both opinions hold a certain amount of truth and logic in them, but if you’re an entrepreneur thinking of launching a business today, which bit of advice should you follow?
Is there a middle ground between the two?
Personally, I think it’s very important that the entrepreneur have an idea about how they plan to generate revenue to sustain their business and grow it from the beginning, but still move forward with an open mind about it all, fully knowing that their idea could change with the evolution of the project.
How detailed these initial ideas or plans have to be depend on the size of the project and the investment being put into it; sometimes they can be just a tiny thought scribbled on a post-it note, and some other times it’s a big elaborate document.
The importance of having this idea of how the business ‘can’ eventually make money is for it to serve as a guide, a reference point for the entrepreneur to keep in mind as they build up their business, and develop different paths towards that goal, and explore other new ones that open up for them along the way.
What are your thoughts on the issue? Business plan or no business plan?
tricky indeed,
on one hand, a business plan sure helps you figure out if your idea is good or not, on the other hand, a prototype would also help a lot for the same thing (even more)
I say, putting time and effort in a BP is only needed at start if you’ve got to convince someone, ie if you absolutlely need funding, even for a prototype
tricky indeed,
on one hand, a business plan sure helps you figure out if your idea is good or not, on the other hand, a prototype would also help a lot for the same thing (even more)
I say, putting time and effort in a BP is only needed at start if you’ve got to convince someone, ie if you absolutlely need funding, even for a prototype
having done a business plan, I can tell two things :
1- it’s painful to write
2- it’s quickly outdated
If a VC asks me for a business plan I have to make a new one from scratch. my business plan is 6 months old.
I think this kind of things is for business people. And since I think only tech guys should make a tech startups. I think it’s useless and VCs should stop asking about it.
having done a business plan, I can tell two things :
1- it’s painful to write
2- it’s quickly outdated
If a VC asks me for a business plan I have to make a new one from scratch. my business plan is 6 months old.
I think this kind of things is for business people. And since I think only tech guys should make a tech startups. I think it’s useless and VCs should stop asking about it.
A business plan can start off as a scribble pad, with random notes being added to that. Brainstorming sessions with bright minds usually gives you extra ways to grow, or to monetize ideas.
At some point, with going to VC’s and all, a more formal version is needed, though the point should lie in getting things up and running.
-m1ke
A business plan can start off as a scribble pad, with random notes being added to that. Brainstorming sessions with bright minds usually gives you extra ways to grow, or to monetize ideas.
At some point, with going to VC’s and all, a more formal version is needed, though the point should lie in getting things up and running.
-m1ke
I personally do not like spending so much time on the nontechnical aspects of starting a business. However, then again, i am interested in Internet ventures, and thus it is entirely possible for me to whip up a few lines of code and throw something together online in no time.
Nevertheless, i have wrote a couple of business plans already for previous ventures, and i found out that you end up spending too much time and effort on something that is so volitile and changes very frequently.
As for me, i much prefer creating a quick version of of the application (either by myself, or with friends), then throwing it up online and trying to gain some momentum. If the signs indicate that the idea is getting a good reception, then it is time to talk about the other “businessy” type of things. Otherwise, i think you would have wasted your time and effort on something worthless. (Ofcourse though, writing a business plan does help solidify your idea .. so your time is not 100% wasted, i’d say about 80%) .. but then again .. this is just my amateur opinion.
I personally do not like spending so much time on the nontechnical aspects of starting a business. However, then again, i am interested in Internet ventures, and thus it is entirely possible for me to whip up a few lines of code and throw something together online in no time.
Nevertheless, i have wrote a couple of business plans already for previous ventures, and i found out that you end up spending too much time and effort on something that is so volitile and changes very frequently.
As for me, i much prefer creating a quick version of of the application (either by myself, or with friends), then throwing it up online and trying to gain some momentum. If the signs indicate that the idea is getting a good reception, then it is time to talk about the other “businessy” type of things. Otherwise, i think you would have wasted your time and effort on something worthless. (Ofcourse though, writing a business plan does help solidify your idea .. so your time is not 100% wasted, i’d say about 80%) .. but then again .. this is just my amateur opinion.
No business plan? How can anyone contemplate that? The purpose of the business plan is not simply to indulge in the business world, it is a very good filter of ideas. Ideas that sound great in your head all of a sudden don’t make sense when put in paper.
It also is a way to persuade YOURSELF of the idea and not necessarily for someone else to read.
I spent 3 times what I had put in my business plan. But I also made even more profit. The next time I have a start-up, I would have learned from my mistakes.
I have had dozens of ideas I thought I wanted to pursue. Only the current company I run was good enough for me to endure the painful process of writing a business plan for it.
If you don’t want to think about the business aspect of things, get a salaried job instead.
No business plan? How can anyone contemplate that? The purpose of the business plan is not simply to indulge in the business world, it is a very good filter of ideas. Ideas that sound great in your head all of a sudden don’t make sense when put in paper.
It also is a way to persuade YOURSELF of the idea and not necessarily for someone else to read.
I spent 3 times what I had put in my business plan. But I also made even more profit. The next time I have a start-up, I would have learned from my mistakes.
I have had dozens of ideas I thought I wanted to pursue. Only the current company I run was good enough for me to endure the painful process of writing a business plan for it.
If you don’t want to think about the business aspect of things, get a salaried job instead.
I think it’s all about the size of your project.
After building your first prototype, if it gain some momentum, it will evolve and adapt to the market needs.
Then, depending to your goal (making money, exit strategy, fun/marketing project) you should write your BP.
I think it’s all about the size of your project.
After building your first prototype, if it gain some momentum, it will evolve and adapt to the market needs.
Then, depending to your goal (making money, exit strategy, fun/marketing project) you should write your BP.
From my experience I found a business plan to be a moving target … It doesn’t make sense to write a fully fledged in early stages but one at least needs to know or have an idea about the revenue models … I found that for early stage startups writing a slide deck and always having it ready and updated to be much better than sustaining a business plan …
From my experience I found a business plan to be a moving target … It doesn’t make sense to write a fully fledged in early stages but one at least needs to know or have an idea about the revenue models … I found that for early stage startups writing a slide deck and always having it ready and updated to be much better than sustaining a business plan …
I have no experience with this but I am curious about the subject so here is my reasoning:
(1) a plan is something very specific and detailed, which, according to make, makes sense only in the very short term. what can be crucial though is a business strategy – a brief document, outlining the basic directions the organisation would follow, the major milestones to be on its way, “plan B”, etc. That is, keep the perspective, do have answers for the important questions applicable to any business, but do not go into too great detail. Think of the business strategy as a map (which you can correct anytime you wish) and think of the business plan as of weekly schedule. You need the map, I think.
(2) I guess it must be natural for many aspiring entrepreneurs to feel aversion to writing any sort of document. After all they have the great idea, they are impatient to work on it and they may be more inclined to action, to doing things, to dealing with what is here and now rather than analyzing, outlining and considering what can be in the future. I can almost feel the torment such type of people have to go through while writing any business document. For them I think it would be best to find a partner or ask a third party to write the document together – that must be easier.
I have no experience with this but I am curious about the subject so here is my reasoning:
(1) a plan is something very specific and detailed, which, according to make, makes sense only in the very short term. what can be crucial though is a business strategy – a brief document, outlining the basic directions the organisation would follow, the major milestones to be on its way, “plan B”, etc. That is, keep the perspective, do have answers for the important questions applicable to any business, but do not go into too great detail. Think of the business strategy as a map (which you can correct anytime you wish) and think of the business plan as of weekly schedule. You need the map, I think.
(2) I guess it must be natural for many aspiring entrepreneurs to feel aversion to writing any sort of document. After all they have the great idea, they are impatient to work on it and they may be more inclined to action, to doing things, to dealing with what is here and now rather than analyzing, outlining and considering what can be in the future. I can almost feel the torment such type of people have to go through while writing any business document. For them I think it would be best to find a partner or ask a third party to write the document together – that must be easier.