Brad Feld posted a blog recently titled “Business Plans are an Historical Artifact.” Are they? Yes. Most business plans are written for the wrong reasons. Primary among these is that the Bank or investor requires the entrepreneur to have a business plan. Brad’s closing paragraph is dead on:
“As an entrepreneur, I encourage you to reject the notion of a classical business plan from the 1970′s. You should still thinking deeply about the business you are creating and communicate clearly what you are doing to investors – just use contemporary approaches that are much more deeply incorporated into the actual creation of your product and business.”
The traditional business plan should be dead because of the reasons they are written. The modern business plan of today is multi piece and a compelling experience. Using contemporary approaches can include a combination of:
- A one page summary that crisply addresses the highlights of the business.
- A developed product prototype with research showing market acceptance.
- An outline format plan that is primarily statements with bullet-ed lists of supporting fact or assumptions.
- A highly visual plan, especially if you are a visual story-teller
- A marketing test showing the entrepreneur can gain the attention of the targeted customer
The contemporary readers of business plans, including the bankers and investors do not want to ready a novel length plan. They prefer a one page summary the gets to the heart of the business followed by information that clearly shows an opportunity for success. The days of raising money with an idea and a shiny document are long gone.