Category Archives: Business Planning

Business Plan Competitions vs. Business Model Contests

Posted on May 17, 2010 | Leave a comment

No One Wins In Business Plan Competitions

Posted on May 17, 2010 by steveblank

Business Plan Versus Business Models
Where did the idea that startups write business plans come from?  A business plan is the execution document that large companies write when planning product-line extensions where customer, market and product features are known. The plan describes the execution strategy for addressing these “knowns.”  In the early days of venture capital, investors and entrepreneurs were familiar with the format of business plans from large company and adopted it for startups. Without much thought it has been used ever since.

… The Alternative – Business Model Competitions
I’ll offer that to be useful for startups Business Plan competitions need to turn into Business Model competitions. A Business Model competition has a radically different goal than writing a business plan.  The Business Model competition measures how well students learn how to Pivot by getting outside the building (not by writing a plan inside one.)

Read the rest here

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Posted in Before you write a business plan, Business Planning

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Recommended reading – Mixergy BLOG

Posted on May 15, 2010 | Leave a comment

The Mixergy Mission

The Mixergy Mission is to introduce you to doers and thinkers whose ideas and stories are so powerful that just hearing them will change you.

The Mixergy Mission is to give you an alternative to the “know-it-all, professional gurus.” I want to convince you that no single person knows it all. I want to show you that the best way to grow is to learn from a mix of smart people who are willing to share their expertise and experiences.

The Mixergy Mission is to infect you with a passion for business and then help you build your business.

The Mixergy Mission is to encourage YOU to have a mission, not just a startup, not just a company, but a calling.

The Mixergy Mission is to act as a counter-weight to all the venture capitalists who’ll try to convince you that the only reason to build a business today is so you can flip it tomorrow. The world isn’t changed by people who have an eye on the exit.

The Mixergy Mission is to convince you to follow a vision so big and important that you can’t do it alone. Then I want to give you a mix of wicked-smart people who will help you achieve it.

The Mixergy Mission is too big for me to achieve alone. If what I’m describing here calls to you, jump in and join me.

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Posted in Assistance to entrepreneurs and startups, Business Planning

Business Planning: A Permission Based Approach

Posted on May 10, 2010 | Leave a comment

From e-360 BLOG – Thom Ruhe

All too often, the business plan becomes the default option for educators and others who have never started a business and don’t fully understand the process. Now don’t get me wrong; planning is important, yet over-emphasizing the business plan can be misleading and often overlooks the more important process (and the really hard work) of proving that there is a market for your product or service. And proving that there is a market usually requires more than a business plan template and a Google search.

In a 2008 interview, entrepreneur and investor Bill Recker described how business plans often become the “surrogate” for the real work of proving there is a market and why so many of the elegantly written business plans that win competitions, ultimately fail. …

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Upstart Advisors – website & BLOG

Posted on May 8, 2010 | Leave a comment

This blog is for you, whether you are dreaming of starting a business, getting your new company off the ground, looking to raise capital, or just making sure your startup is on the right track. You’ll find topics like: What’s in a business plan, how to determine whether you’ve got a good idea for a business, and how to think about financing your venture. You’ll see that my approach favors speed and flexibility - a combination I find practical for today’s environment. You’ll also find me saying that the most important aspect of business planning is the thinking behind the plan.  Need some help? Click here to learn how UpStart Advisors can help you launch your venture.

Read the BLOG here

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Posted in Business Planning, Business Start-ups

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Scenarios – MBA Monday lesson from “A VC”

Posted on May 3, 2010 | Leave a comment

Scenarios

In last week’s MBA Mondays, I introduced the topic that we’ll be focused on for the next month or so; projections, budgeting, and forecasting. In that post, I described projecting as a “what if” exercise that is done at a higher level of abstraction than the budgeting and forecasting exercises. I said this about projections:

These are a set of numbers, both financial and operational, that you make about your business for various purposes, including raising capital. They are aspirational and are often done with a “what could be” perspective.

Since projections are not budgets and are much more “big picture” exercises, it is important to use a scenario driven approach to them. I generally like three scenarios; best case, base case, and worst case. But you could do as many scenarios as you like. It’s not the results that matter so much, it’s the process and the learning that comes from the projections exercise.

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Posted in Business Planning, Venture Capital

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Are Business Plans a Work of Fiction?

Posted on April 27, 2010 | Leave a comment

Video: Are Business Plans a Work of Fiction?

Randy Komisar, Kleiner Perkins Caufield & Byers – 2 min. 6 sec.
Can one truly develop a business plan before having a product or a customer in-hand? Not very successfully, contends KPCB partner Randy Komisar. In this clip, Komisar discusses the premise for his book, Getting to Plan B, in which he points out how often the theory of a start-up succumbs to its execution. Komisar goes on to point out that thinking of Plan B as part of the process can change the way we think about constructing and managing the start-up.

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Posted in Business Planning

Pulling numbers out of the air

Posted on April 12, 2010 | Leave a comment

No, You Can’t Just Pull Numbers Out of The Air

Question: I’m in the process of writing an Internet startup business plan to present to prospective investors. The site isn’t live so I don’t even have a basis for speculation with respect to the financials. I would essentially be pulling numbers out of the air. Being that the Internet business as it pertains to advertising revenues is so mercurial, is it feasible to present the plan without having the financials included? If not, how can I make more realistic financial assumptions?

My answer: No, you won’t get anywhere presenting a plan to investors without financials. I’m glad you asked me instead of just moving ahead with that idea.

Every new business, including website business as well, has to be able to present a reasonable forecast if it’s going to hope to get an approval from outside business. And it can never be “pulling numbers out of the air.” The assumption is that before you start a new business you have some idea how it’s going to work, based on some experience. If you have no idea, no investor wants to even share the same elevator with you.

In this case, the website business, you need somebody on your team who can project website traffic and sales based on real experience with search terms, search engine optimization, Google ad words and its competitors, conversion rates, and so on. Your traffic doesn’t get pulled out of the air, it’s a function of what you plan to do and what you plan to spend. Know your key search words and the traffic those words and phrases get for others, right now. Know reasonable conversion rates. Make estimates based on real assumptions about real variables.

For more information on this, you could try:

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Posted in Before you write a business plan, Business Planning, Business Start-ups

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Life plan before a business plan

Posted on March 23, 2010 | Leave a comment

Life plan before a business plan

To really get a good picture of your life plan as an entrepreneur, answer the following questions:

  • What kind of lifestyle do you want to have as an entrepreneur?
  • How big do you want your business to get in terms of profits and staff?
  • Will you have employees?
  • How many hours a week will you work?
  • Do you need to meet the school bus every day or take off every Friday?
  • Are you willing to work seven days a week? If so, how long can you keep that up?
  • Will you need a partner and could you handle working with one?
  • How will you fund your household while you start your business?

You may have a great business idea, but you must decide if it’s a good business for you and your family.  Do not trade a soul-sapping job for a business that you hate.   With a life plan you will have a goal, then you can develop a plan that will lead to personal and professional success.

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Posted in Before you write a business plan, Business Planning, Entrepreneurship

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Before You Write a Business Plan

Posted on February 5, 2010 | Leave a comment

Look. Thinking through your business start-up is essential. But there are some steps you should take before you sit down to write your business plan. And in some (many?) cases the business planning process just interferes with the essential “real-world-proof-of-concept” step.

From Tim Berry’s free “Plan as You Go” book and website.

Before You Write a Business Plan

Validating the idea and understanding the business model are pretty important steps that should come before writing a business plan. That’s hardly a novel idea.

Still, novel idea or not, successful entrepreneur Vivek Wadhwa spells out the early stages very well in a BusinessWeek special report published in early 2008, “Before You Write a Business Plan.”

He starts with a short list for validating the idea:

  1. Write down your thoughts on the product you want to build and the needs you want to solve. You’ll be detailing your hypotheses.
  2. Validate these hypotheses with as many potential customers as you can. Ask them if they will buy your product or service if you build it. Learn about what features they need and what they will pay for, ask them for more ideas, and be sure that there is a large enough market.
  3. Build a prototype of your product or offer a test run of your service and again ask potential customers what they think about it. You’ll find that customers usually provide much better input when they can actually try out a product.

Then Wadhwa also suggests a slightly longer list for developing the business model, by answering s a series of questions. …

To read the entire article click here

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Posted in Before you write a business plan, Business Planning, Business Start-ups

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How to Write a Great Business Plan

Posted on September 8, 2009 | Leave a comment
“How to Write a Great Business Plan” has been one of the most downloaded articles on Harvard Business Publishing since 1997.

Harvard Business School professor William A. Sahlman‘s article on how to write a great business plan is a Harvard Business Review classic, and has just been reissued in book form. We asked Sahlman what he would change if he wrote the article, now a decade old, today. Key concepts include:

  • A business plan can’t be a tightly crafted prediction of the future but rather a depiction of how events might unfold and a road map for change.
  • The people making the forecasts are more important than the numbers themselves.
  • What matters is having all the required ingredients (or a road map for getting them), not the exact form of communication.
  • The best money comes from customers, not external investors.

Bill Sahlman: Writing a business plan is a seminal moment in the life of a new venture. Doing so entails committing to paper a vision of the factors that will affect the success or failure of the enterprise. People take the exercise very seriously and get emotionally invested in what they produce.

In that context, the article was written to give insights into how to think about the role of a business plan and its relation to new venture formation. I tried to explain that a business plan can’t be a tightly crafted prediction of the future but rather a depiction of how events might unfold and a road map for change. I emphasized the notion that successful entrepreneurs constantly seek the right mixture of people, opportunity, context, and deal. They anticipate what can go wrong, what can go right, and they try to balance risk and reward.

Over the years, I have received many e-mails from folks trying to craft a business plan. They want feedback. Actually, they really want me to say that they are on the right track. I explain that I would need to get to know them and their opportunity much better than what is possible in an e-mail and that the written document is not as important as the people writing it. It’s not science—it’s art and craft.

Click here for the entire interview.

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Posted in Business Planning, Business Start-ups

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