A Business Plan Is For You, The Founders
The current Business Plan for Microwd is 10 pages long, 2,800 words and labelled V11. At it's largest, it was over 6,000 words. It has currently been viewed by 16 people directly, and probably more including those 16 people showing it to trusted colleagues/advisors.
But our business plan isn't for those people. It's for us, the founders.
Woah, Not So Fast There Cowboy!
Now I'm not an idiot, so I'll address the first thing that many people just shouted:
"A business plan is for investors!"
Okay well maybe. All investors will request to see the business plan.
But is a top class business plan going to attract investment if the founders have poor credibility, poor background skills, poor charisma, poor attitude? It certainly isn't.
In my experience so far, I've gone over every detail of the business plan when I've had followup meetings with investors. Why? Maybe they want to hear it from the funders in person, to check you understand it fully. Maybe because a spoken sentence communicates 100% more from than a written one.
The point is, the Microwd business plan has pretty much been delivered in it's entirety verbally to almost every investor I've spoken with. I've explained each section, in the same detail as the plan (and then some), over coffee/lunch.
So, was the business plan really for the investor, or was it for me, to organise those thoughts and messages and arguments, to incorporate improvements to the model, so that I could deliver them with increasing clarity with each coffee?
I'm finding this is the case for Microwd, and particularly the angel Investors I'm speaking with.
Here's An Example...
After a recent conversation about activating the business model, one investor made some great points and showed how, with some clever timing, we could potentially half or avoid a future funding round we'd planned. He just put it on the table, and simply offered:
"Why don't you run the numbers, I'm curious what the plan would look like..."
So I did. and he was right. With some clever timing (and a lot of market research too to check the pricing) I could potentially squeeze out the need for a funding round that would have diluted everyones shareholding - including my majority.
Having the balance projections in their 8th version, and the business plan in the 11th, shows how iterative a business planning process can be. Just by seeking the investment, we're already learning so much more about making Microwd leaner, much leaner, and potentially much more profitable, maybe skipping the ramen profitability stages.
I'm happy that investors want to look over our plan. I love the feedback - it's basically free coaching for a £500/hr consultant.
But it's for us. Its ours. It's a map of our iterative (agile?) planning process. It has 16+ co-authors already, with combined turnovers across those co-authors into the tens/hundreds of millions. It's only 10 pages as an end result, but it's had tens of thousands of words put into it.
I've read a fair share of 'Maverick Entrepreneurs' who dismiss business plans, and say they weren't in any way a contributing factor to making their millions. But I don't buy it.
Try This For A Tester
Even if you write the business plan after you've started trading, speak to 16 different investors/entrepreneurs about it, and then try and tell me you don't learn anything or want to change something in that plan.
What are your comments? Did you write a business plan pre-startup? Have you written one since?