There’s a great piece in the WSJ on line called "Do Start-Ups Really Need Formal Business Plans?" by Kelly Spors. I’ll leave the meat of the article for your reading pleasure, but I wanted to throw my 2 sheckles in. I think the core of the matter is really whether or not you’re creating the plan for yourself or to raise capital. If it’s for yourself, you wont waste the time on the unnecessary fluff anyway.
- If you’ve decided to make it or fail…you’re always right. A business plan means nothing for you in the determination equation.
- Most of what you put in your plan will be meaningless within X months. Especially in today’s business climate, it’s more important to know that you’ll adapt well vs. how well you format your market research.
- Elaborate financial models are manipulated to yield the results required to get the funding you need and will typically net the numbers below. If VC’s know this, why do they keep asking for 5 years of fake financials?
- year 1: Loss
- year 2: Break-even
- year 3: $3 mil
- year 4: $7 mil
- year 5: $21 mil
I’m curious, what do you think YouTube’s bizplan looked like? I’m sure some research will yield the answer…but I’m guessing it was pretty simple..or a few PPT slides.
Spend time on your market, why you have a defensible niche, and how you and your team will be able to roll with the punches and adapt.