There are plenty of data sources to back up assumptions and to complete research. Startups chances of venture viability rose by 27% if the plan was created in the sweet spot when founders were talking to customers and preparing marketing.Īccording to and Rule’s Book of Business Plans for Startups, founders should be considering these factors when creating their plan.įortunately, crafting a business plan has become much simpler today.Chances of success rose by 12% for those that spent no longer than 3 months on their plan.Stating that this “increased the probability of venture viability success by 8%.” The “most successful entrepreneurs were those that wrote their business plan between 6-12 months after deciding to start a business.Because of these realities, business plans written at the start end up nothing more than a fable.” Entrepreneurs often have to pivot their business once it becomes clear that their original customer is not the right customer, or when it turns out that their product or service fits better in an alternate market. Harvard Business Review (HBR) says “the real key to succeeding in business is being flexible and responsive to opportunities. Too many founders have also tried to cram the equivalent of a business plan into a pitch deck, only to find it is a hindrance to getting the results they want. Getting lost in rehashing and dragging out a business plan for a year or more can cost your startup the optimal moment to get to market and the best funding opportunities. The big problem with business plans is that entrepreneurs often get bogged down in them. So is the time you spend on it, and when you do it. Like a pitch deck, it it’s good enough it can be sufficient to get lenders and investors to choose to work with you, and work through the details in the process.īest Practices for Building a Brilliant Business Planįormat, substance, and key data that viewers expect are all important. This is a brief 1-3 page document that sums up your business and plan, and gives viewers enough info to decide whether they want to see any more data or not. This is especially true for those considering funding that involves commercial real estate or a SBA loan. It is a smart tool and essential one to have as a cover for your business plan. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400M ( see it here )Īn executive summary is a different document again. Not long ago I covered the pitch deck template that was created by Silicon Valley legend, Peter Thiel ( see it here ) where the most critical slides are highlighted. Most of this you can cram into a pitch deck, at least with a good appendix. Knowing your burn rate, and never falling below 6 months of cash.In contrast with old school business plans McClure recommends: Can you scale customer acquisition cheaply and measurably?” We look for functional prototypes and customer development and most importantly, scalability.

If you want to get funded by David McClure, then he says he wants to see “a functional product that people are using. The other is more organizational an internal in nature.

Yet, one is for presenting and specifically for getting funding from angels and VCs. If your purpose is to raise funding, and your startup isn’t going to go anywhere without, then make sure anything you take time out to create is going to relate in today’s fundraising environment.īusiness plans and pitch decks are two different things. If you are planning to go to a local bank for a business loan, or are approaching your sphere of influence for backing who you know is accustomed to seeing legit business plans, then you know you probably need to create something that they understand in a format they are comfortable with. In fact, Brian Chesky (founder of Airbnb) is famous for his one-page business plan for global domination. If that’s all you need, and you don’t plan to raise money, apply for loans and don’t intend on bringing in partners, then you certainly don’t need a 25lb manuscript. You have focus and hopefully aren’t going to run out of money or starve before you get going. You should have a plan in order to get yourself organized and to ensure you have some type of viable commercial potential. Yet, the point is that most aspiring business owners aren’t even trying to match up their goals with what they think they are supposed to be doing.

In fact, Silicon Valley angel investor, VC and founder of 500 Startups, David McClure says “don’t write a business plans.” We’ll show you what he does want to see if you hope to get a funding check from him in a moment. Don’t do it unless you know why and what you are trying to achieve with it.

Traditional business plans can be big beasts of a project that suck time, money and mojo at a vital moment. Just because it is the status quo should never be a line in the vocabulary of a startup founder today.

The best business plan book