Few areas of business attract as much attention as entrepreneurship, and few aspects of entrepreneurship attract as much attention as a business plan. Increasingly, business plan competitions are springing up across the world, partly helped by the marketing gimmicks of business schools. Indeed, judging by all the hooplas surrounding business plans, you might want to ask yourself what happen to all those eventual winners, many of those MBA graduates would no doubt went on to work in investment banks, drawing huge bonuses managing venture capital and private equity funds rather than taking the uncertain path of entrepreneurship.
Nothing could be further from the truth, in my experiences with the hundreds of entrepreneurial startups, business planning persistently ranked as one of the least important aspects of entrepreneurship. In fact, most wasted too much time and effort on numbers rather than actual implementation and the more elaborately crafted the documents, the more likely the venture would flop. Don’t misunderstood me, business plans are necessary for the eventual entrepreneur to soul search and clarify to himself his actual thought process, address unforeseen issues and to analyze likely market competitions and potential structural changes.
There are plenty of existing business plans templates you can Google on the Internet. On will provide an automatic formula for winning. Rather, business plans are meant to be temporary and subject to changes all the time. There is no need to follow the execution plan step-by-step. Rather, the general strategy should comprise of the following three core of interdependent factors critical to new ventures:
a) People – The people starting and running the startups. Without the right people, nothing else really matters. “I invest in people, not ideas”, is the famous saying of Arthur Rock, a legendary venture capitalist associated with the likes of Apple and Intel. The men and women involved should also include third parties providing key support and resources to the venture.
b) Business Profile – The profile of the business itself. Selling the right thing is a battle half-won. These include questions like who will be the expected buyers, how fast can the business grow and what factors stand in the way. The business owners need to be specific on where the source of income is going to come from.
c) The Big Picture – Social and technological evolution that are beyond the control of any entrepreneurs. Imaging trying to sell pagers 10 years ago. For this particular factor, would entrepreneurs must prepare to eventually cut their loss and stopped their businesses or switched to another products and services should situations changed. Many successful ventures adapted to new market environment and were in very different lines when they first started. This is also where a shift in market environment can turn an unattractive idea into a highly profitable ones.
Good business planning is like a video show into the future, and discuss people, business profile and the big picture as a moving target. Be prepared to tear up the original plan and go back to re-write it as you move on.