There are no good excuses for not knowing how to write a modern business plan.
As Jason Volmut of Chicago-based remote IT management company CPURX put it, “If you fail to plan, you plan to fail.”
Take a moment on any search engine, and you can find the standard format from the U.S. Small Business Administration: executive summary, company overview and company product line.
Instead, take a moment to think about why so many still insist that entrepreneurs develop such a familiar document at the beginning. Some of it is logistical: you’ll need one for bank lending or any number of business plan competitions and for other early advisory meetings. For other reasons, it’s philosophical: it’s a set of definitions and goals that you and your cofounder, and investors or major partners, should be able to agree to.
Even more meaningfully, it’s meant for you to put your own thoughts into writing so you can prioritize action. Remember, a business plan is often called a “living document,” meaning that though the fundamentals might likely stay the same, you should update it when necessary. Often companies might return to their business plan a year after launching and then perhaps a few years after that to see if much has changed. If so, it should be updated to reflect your goals and model.
As the technology needs of small business owners in Chicago change, Volmut’s business plan adjusts with them. It’s a living document.
“A business plan is really your roadmap for your business’ success. It’s something that we update at least twice a year, sometimes quarterly, but it’s essentially the blueprint for growing your business, whether that’s through additional sales or acquisitions,” Volmut said.
Start by knowing what that big organizational goal is.
“Do you want to sell to Google? Do you want to go public? Do you want a business you run for 20 years? Do you want some part-time income?” said Frank DeSantis, the director of the Emerging Enterprise Center, an incubator operated by the New Castle County Chamber of Commerce in suburban Delaware. “There is no wrong answer, but you need to know what you want.”
From there, you need to know how you uniquely deliver value.
“Nobody cares about you. Nobody cares about your business,” deSantis said. “They care about how you help them.”
Start with that mindset from the start. It’s something General Assembly cofounder Brad Hargreaves, who is now running venture-backed, Brooklyn-based co-living company Common, learned lesson with his first company, an online gaming company GoCrossCampus that failed.
“We never thought about how to make money, and we didn’t have the scale of Facebook or Twitter, where we could kick the can down the road,” he said. “You can’t just go and start a company by building an app anymore.”
The point is that writing a business plan is one of the universally familiar acts of entrepreneurship and so it can seem trite. But it’s a necessary building block to create clarity. Don’t ignore its importance.
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