The Business Plan, is something that you're likely, familiar with. You've seen it, you're heard it, you've read ones, maybe you've even written ones in the past. We're going to spend a few minutes here recapping some elements and providing some reminders for a few things you may already know, but also work to really drill in and address some key purposes of the plan and its true audience. So we'll talk about what's the plan, why write a plan, and what are some of the advantages and disadvantages of great plans? Fundamentally, it's the playbook for the company. It's the plan for the creation and management of the firm. It incorporates elements of marketing, of operations, of financials. There will also be some addressment of the product in the team as well. What it does also is it tries to match the life cycle of the company. It's what's happening at the beginning at the concept, but it doesn't end there, it should track through what the vision is. For the growth and ultimate maturity of the company, as well. Now you may spend the majority of the time talking about what comes first, but we don't want to ignore what comes later. We also want to have it be very quantifiable. There should be lots of numbers. Not only in the financial section, but as you're looking at the market and as you're sizing the market and talking about the industry and evaluating competitors. It should be a data rich plan. It also should address the team. Many of the investor will look at the team before they look at the product. They'd rather invest in the A team with the B product than a B team with an A product. So if Bill Gates came to you and he's got a new concept, you would probably invest with him because he's Bill Gates. Before you even know what the concept is. So don't short-sell the team and don't short the attention that you're paying to the team when you're writing your plan. It should also be the owner's manual for the company. So why write the plan? Fundamentally, it will help you define the business and the business objectives and be objective in writing about that. And it's something that you can use as your playbook for the company. It also helps focus ideas. And it helps measure the feasibility of what you're doing, and what your path is for the success. It also is an operational tool. Where you can see where you are or where you want to go and what the road map is to get there. It also helps in being able to manage and prepare for success and adaptation. It lets you know why you're doing what you're doing, and once you've done it, it's a reference point for why we did what we did. It also it's a strong communication tool. It defines your purpose. It evaluates your competition. It's something for you and management team to define your goals and your financial goals as well and to put those on paper. It can also be the basis for a funding proposal. Most investors will either ask for a business plan, or even the organizations and accelerators, like 500 Startups, and Tech Stars, and Y Combinator, if they don't ask for a plan, they're still going to want to get at that information, and so within their application form. They might have segmented the pieces of the plan into 40 or 50 segments, where you're still answering many of those business plan questions, you're just answering them in more of a segmented format. You'll also be addressing the value chain in your business plan of what do you do and what do you outsource and are partnered with others to do. So what we find in most companies, most Startups, have an in-house infrastructure. Their HR, their technology, their sales and marketing they do. And then they outsource many of the other elements. Independence on you and your plan. Now the advantages of great plans is it's a yardstick to measure performance. Again, an opportunity to list what we're going to do, why we're going to do it, when we're going to do it and what our goals are. It's a starting point for other plans. You'll likely have plans for your operations. You'll likely have a dedicating marketing plan. You'll likely have a dedicated financial plan. But, this is your launching point for that. It gives you the opportunity to demonstrate. How you going to focus on profits and what you believe those profits to be able to go back a month from now or a quarter from now, and see are we doing what we set out to do and if so, why or why not? It gives you an opportunity to connect the company, of looking at all the pieces of the company and how they're going to work together. It's very attractive as a tool to recruit a management team. People may want to understand what you're going to do and how you're going to do it. And it's something you can use as a recruitment tool, to bring on a management team, and to bring on advisers. And it will greatly improve your fundraising ability, as well, for people to know what you're going to do, and how it's going to work. There are disadvantages. It takes time. It takes research. It takes thought and deliberation and argument and agreement to come to a plan that your team buys in on. It also must stand up to criticism and challenges. It can't be laden with just assumptions. It should, in my opinion, be much like a research report, where there's data, and there's references, and there's support. And it's comprehensive, and it's defendable. It also is going to need to stand up to some honest and critical appraisal. As you begin to share it, some people are going to like it. Many people may not, and you have to be prepared for that. It also is not something that you do once. It's something that you should revisit. In the early days of the venture, you might revisit it monthly, or quarterly. And it's something that you have to agree on as a team. What's the number? What's the strategy? What's the activity? And in that way it's something that takes time to do if you're going to do it well. So in summary, the business plan, in my opinion is the owner's manual for the company. It provides a tool for you as the owner, or ownership team. To plan, to track, to adapt. And to raise financial capital, if you're of that mindset. It takes time, but I believe it's time well spent. And in that measure, when you are planning how to do something, rather than just simply doing it, you know what to do, when to do, how to do. As well as what the expected outcome was, and that is time that's certainly well spent. And I think you'll save a lot of time by writing a sound plan, than by trying to run without one.
