Many entrepreneurs get caught up spending a lot of time writing a business plan and miss the forest for the trees. They might be better off investing part of that energy elsewhere. The best written business plan will not do its author any good if no one others to read it.
In my life as an entrepreneur, I pursued numerous business ideas, started 10 companies, and made 8 small business acquisitions. Yet the most thorough business plan I ever wrote never materialized into an actual business. Through my involvement with various incubators and in past corporate lives, I evaluated scores of business plans and helped fund or acquire many business ventures. In most cases, the detailed review of the business plan, while important, was by far the most critical step in the process.
Investing time in the following areas might be at least as important:
1) Evangelize your idea. The first crucial step is to get people interested in you and your idea. If they are sold on your concept, your product, your passion, and if you can inspire confidence, an average business plan write up will do. What's important is the conversation around the plan, more than the actual document itself. Evangelize potential customers, potential vendors and partners, but also your friends, your dog, and anyone in your network. The practice can only do you good, and you never know where the decent connection might come from.
2) Practice your elevator pitch. Both the 30 second version and the 3 minute versions are paramount because they set the tone.
I recall once spending too much time introducing myself to Tom Siebel, founder and ex-CEO of Siebel Systems. In just one minute I had lost him entirely and never had a chance to talk about the business I really wanted to attract his attention to. It would not have mattered if I had a Pulitzer prize winning business plan, my opportunity was gone. Another time, a simple handshake with Microsoft CEO Steve Ballmer led to a much lengthier conversation. This time, my well rehearsed 30-second pitch hit the mark and triggered questions, interest, and a dialogue.
Look for organizations that will help you practice your elevator pitch, like VC-TaskForce in Silicon Valley, where you can do this in front of other entrepreneurs and real VC folks. Your local Chamber of Commerce or local entrepreneur group may put you in touch with similar organizations. And of course, practice the pitch in your car, in the shower, and to your dog.
3) Nail down your 10 slide PowerPoint presentation. Working on these 10 slides, and their delivery, might be the most important time investment you will make.
The presentation must be comprehensive, yet crisp and concise. Make it self-sufficient, such that folks who spend just one minute flipping through the slides will have a pretty good idea. Do not try to explain everything. The presentation should give the viewer a solid taste of each course of the meal, how the various dishes fit together, but it is not the whole dinner. This is the most important vehicle to communicate your business plan. Keep details for Q & A, but be ready with solid back up slides and spreadsheets that should be brought up only when your audience requests for a deep dive into a particular subject. Check Venture Capitalist Guy Kawasaki's blog on the 10/20/30 Rule of business plans and PowerPoint presentations for what these 10 slides should look like.
4) Get Going. A business plan may help you get funding, but it will not help you get customers. In the end, customers are a lot more important than funding partners. Spend more time building your business than writing your business plan.
Perhaps you can get off the ground without external funding. Bill Joy, co-founder of Sun Microsystems, told me once he did not believe there was such a thing as a successful, well-funded, start-up. In his mind "well funded" opens the door to all sort of excesses and inefficiencies. I whole-heartedly agree. The discipline of making things happen with very little resources is invaluable. The good news is that it is a lot easier nowdays to build a business on a bootstrap budget.
5) Get Help. No one expects you to be a genius inventor, a financial expert, a marketing guru, and to know how to sell ice cubes to an Eskimo all at the same time. It's okay if some sections of your business plan are not as strong as others, as long as you do not really embarrass yourself anywhere. Make sure that what makes you and your product really special stands out.
Here are a few good resources:
o If you need to submit a business plan to a banker, you'll find some good suggestions on the Small & Business Administration web site. For a 30 minute free "course", in the form of a power point presentation on how to write a business plan, go to the Small Business Administration site.
o You can buy software programs that help automate the process of building the business plan. I have not tried any of this software myself but I have seen some of their output that looked very decent.
o If you are serious about getting help to become an effective CEO and to get funded, consider joining one of the programs offered by The Founder Institute, which works as an incubator and provides a serious curriculum to make the selected CEOs "fundable."