others insist on having a business plan - to each his/her own.
I always felt it was a useless exercise to write up a business plan before starting a company. Well, I found this quote by a Venture Capitalist....
"Business plans are bullshit. You may think they are great but I havenít seen a VC ever read a business plan or fund a company based off of one. I could be naive, but I think they would rather have you spend your time on launching your company compared to writing a 30-page document"
I tend to agree. Writing a business plan will have no bearing on the success or failure of your company....and may have very little influence on potential angel investors or venture capitalists.
others insist on having a business plan - to each his/her own.
It's all about what works for you in my opinion. Obviously everyone has a "plan" while starting a business. Whether you need a formal one or not depends on your investors, and how much structure you need as a person.
IMO, I believe that a business plan is somewhat overrated. You need to have a plan when starting up a business, but it doesn't need to follow an exact guideline. Focus your time and energy more on starting up and running your company than just writing about it. If the time comes that you need to write a plan for potential investors or VC capital, you will.
**Formerly known as Lamboman350K**
It's part of the movement. Whether you think it's important or not, it's a formality like getting a degree from a college. If you have it, it helps. If you don't....well, you better have something comparable to replace it.
You right, they rarely read it. But they want to know you are capable of putting one together.
For those who think most VCs don't read business plans, how many VCs do you know and have you spoken to about this?
I have tried to (unsuccessfully) raise money via VC, I have invested in several companies that have successfully raised money via VC, and I have many friends and former colleagues who are VCs, and almost universally, the attitude is that if you can't put your plan down on paper (even if it's just a few paragraphs or pages), you probably haven't thought enough about your plan. Plus, at every initial VC meeting I've sat in on, the outline for the discussion has been the business plan.
Sure, there was a time a few years ago when VCs would throw money at your pet parrot if he knew how to say "dot com," but those days only lasted a short time and are now gone.
If you are looking for an excuse not to have a written plan, feel free to ignore this post. But, if you're serious about raising VC or angel funding, I highly recommend spending some time getting your plan from your head to paper...
One of the most important thing I've learned in my 16 years of owning my own businesses is that being able to follow (and more importantly sticking to) a plan is crucial for success.
By following a plan, it avoids any emotional influence and any distractions that cause bad decisions.
A very well written plan, with concise and thought out steps that covers all scenarios enables the principals to correlate all decisions that coincide with the original plan.
**Formerly known as Lamboman350K**
As was said above it depends on your goals. If you are raising capital from outside sources a formal business plan is a must.
An informal business plan also helps you flesh out your plan and forces you to take a look at the numbers. A lot of failed businesses would never have been formed if the owners had taken the time to crunch the numbers and do their homework before hand.
The process is a worthwhile one if only for you to see what it would really take to operate such a business.
Would you drive your car at night with no headlights on?
This is a tough time to attact money to businesses (start up or existing) so a well thought out and written biz plan is crucial.
That said, I've seen 100+ page business plans with elaborate slideshows. And even then those are still having trouble attracting funds.
I think what I meant is that the "master plan" is in your head, after all... you're the boss right? The reason why your employee can't run the business some where else even they know the "business plan" is maybe they don't have the execution or experience.
But again, the written business plan is just a FAQ to me, whether or not you write one, you should know how your business goes.
Maybe you are more experienced than me, but I am dealing with investment amounts (IPO) of more than 20 million at the minimum. All the business plan is, is a 20-30 page FAQ.
Business plan doesn't bring in funding. It helps to answer the question though.
What brings in the funding is the business model, the growth, the financial models, and a strong bank or investor group to back up the company. Most importantly, you need someone to really create a buzz and sell the story on your company, even the best company cannot bring in funding if it sounds stale and boring.
Business plans are nothing but ideas on steroids ... if you don't have a track record of execution to back up the business plan, they are worthless.
A business plan given by some guy with no experience, no execution, no wins = USELESS and not worth looking at.
A business plan given by some guy who sold his company for $40 million 3 years earlier? VALUABLE and Worth Looking At.
A seasoned executioner of the business plan validates it, without it, its nothing but a worthless 100 pages of Kinko's bound collateral that shows you could put together a college-level report.
Mind you, this "take" is NOT a recommendation to skip financial analysis about any particular business/investment.
i don't think it's useless to write a business plan.
a business plan is a PLAN. those who fail to plan, plan to fail. it's a PLAN, a GUIDE, a sort of direction your company will take.
every so often, you can look at it, and see if your company is going in the said direction. If not, that doesn't mean you are off track, it can simply mean your vision is much clearer, then it's time to reupdate the PLAN.
Some people are good with mapping things in their mind, and you can give them direction from Miami to California, and they wouldn't need to write it down or use a GPS and they will get there. For such people, there may be no need for a business plan. Some people are more grounded when they write things down. It's all about making it work for you.
Winning is not found in the prize, winning is found in the doing.
The VC's may say that because most business plans are crappy but that doesn't mean a well researched biz plan is extremely valuable. I just read a 32 page slick looking plan and I couldn't tell what the damn business was!!! Terrible. Full of fancy words, buzz phrases, acronyms but ZERO substance. Fail.
A good well thought out biz plan shows you are prepared and ready to mitigate risk ensuring the best chances to success.
Biz plans are just a written check list of what you need to do to be successful. Biz plans should be good guidelines on execution. I can't keep everything in my head, gotta write it down.
Skip the fluff and stick to basic research and execution. Specifically what you are going to do and how you are going to do it.
Many confuse business plans w/ slick marketing/PR material. Two different things.
I find it difficult to comprehend that investors would consider a company whose 30 page biz plan is just an FAQ.... the ones I have seen and even helped contribute included comprehensive marketing strategies, demographics of the consumers, real estate listings and acquisition data, etc, etc, etc, etc, and even more etc... these were very intense biz plans and are securing funding of 50mm privately.
It behooves anyone "who knows how their business goes" to construct an operational plan and insert that information right into the biz plan. Afterall, these ideas need to be formatted anyway.
what investor would want to throw 20mm of funding at a company with just an FAQ? If I am investing in a project that I've never heard of before, I would really want to know the intrinsics of the business, the daily operation, the goals, mechanics, number of employees, job descriptions for them, etc.
I am not experienced in IPO's, that's a different ball game. There were only 58 of them that came to fruition in 2009 so you obviously have a handle on this and you are apparently on wall street if you're working with the IPO market. These investors that IBs are selling to are probably buying a lot of sizzle as you've mentioned, but a lot of the costs gets trickled into the investment brokerage house instead of the shareholders.
If you want your business to have personality and focus, of course, you will need a business plan and convey it to the investors in a way that they, too, will want your business to materialize and succeed. Hire someone skilled in this, work closely with him, and pay him well. Investors may say no but if your plan is done professionally, well-researched, and you really have some solid ideas, at least you left a good first impression.
Think outside the box. It may not be a popular business or something they have heard of but if you can present a good plan, you might have a chance. More than money, it's all about ideas...good, solid ideas backed by a well-thought out presentation.
As a dude just starting out, I feel like (I don't know for sure since this is my first time doing it) that as some of you guys mentioned a PLAN is crucial, but the section-by-section "Business Plan" seems like utter nonsense.
So, I made a Business Mind Map. Something to give me a framework to operate off of. Basically I laid out my end goal, and the stuff in between. Granted, some of the stuff in between I have no idea how to do, but I don't need to learn them until I get there. Right now, it's all getting started.
Here's what I put in my Business Mind Map:
- Hedgehog Concept (Think Good to Great
- Needs I'm Focusing on Filling
- Marketing Strategy
- Sales Strategy
- Company Characteristics
- Community Involvement & Social Responsibility
- Start-up Financials
- Progress Mechanisms
It's not all perfect, but I think with a mind map you can work the kinks out along the way.
This is probably the best advice I've come across for business plans. He's pretty much saying you should write one but it doesn't have to be overcomplicated.
[ame=http://www.youtube.com/watch?v=QxqfxXAN4rk]YouTube - Should I prepare a business plan? - Lord Sugar's Business Basics[/ame]
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