A Few Ideas About Business Planning for The Strategic Startup

1. Business plan only shows how much you understand your idea.

2. Business plan doesn’t show how much you can execute.

3. Nobody follows their business plan – since no plan actually works;  a business plan for startup only serves as a (lousy) guide, yet you need it.

4. Realize that what matters most to a startup isn’t some 1000-page business plan, but a rough sketch of how you intend to get things done.

What matters most to you as a startup is that you have an idea you understand so well, you build an MVP quickly and launch it fast to engage users and get feedback from them to see what they are saying.

Business plans work best for traditional businesses and established companies who already know their customers and what they want to a high degree of certainty – unlike startups that are defined by uncertainty. In fact, one of the pioneering entrepreneurs of the lean startup movement, Eric Ries, defines a startup as “a human institution designed to create a new product or service under extreme uncertainty”. So if uncertainty defines a startup, then you don’t really know who your customers are or what they want (you don’t know what to build, basically). You can only hypothesize on who your customers might be and what they might want (that is part of your business plan as a startup). Then you go ahead to test that and see what works out. Then keep iterating fast to get to product-market fit – if you are ever lucky to get it.

5. Since you can easily find and learn how to put up a good business plan from most places, we don’t dwell excessively on that here.

You can always get a business plan done very easily and quickly. There are even templates and software out there that can help you achieve that. So you go ahead and search them out. (I recommend Best One-Pager: The One Page Business Plan for the Creative Entrepreneur by Jim Horan and Tom Peters, and The Art of the Start 2.0 by Guy Kawasaki.)

(More on that, here.)