Coming up with a business plan is crucial when you're starting out. The idea of putting down all the thoughts, research, dreams and plans you've been holding in your head for months as you prepare to launch a business may seem too overwhelming to undertake as a new entrepreneur, but the plan doesn't have to be dozens of pages long. Some experts will tell you it only needs to fit on a Post-it note. What matters is that it provides you with a road map of what your business will look like, who your customers will be and how you'll deal with setbacks.
"You want to make sure you understand how the business is going to work, how it's going to work within your life, what that balance is all about," says David Wilton, director of small business banking at Scotiabank. "A good business plan can help you think all those things through and anticipate problems before they actually occur."
Akira Hirai, chief executive of Cayenne Consulting, a California-based firm that helps entrepreneurs develop pitches, business plans and financial forecasts, says it's important to avoid getting too caught up in "analysis paralysis" by overthinking the details. Keep things short and simple.
The plan only needs to map out the broad strokes and include enough information to start getting feedback. "When it's time to prepare a business plan for potential lenders or investors, less is often more," Hirai says. "These are busy folks, so brevity is appreciated. A 20-page plan will usually produce better results than a 50-page plan."
Regardless of how many pages you chart your course in, here are some of the key elements experts suggest incorporating:
Ten pages should be enough to cover these areas. If that still seems intimidating, keep in mind that while a detailed plan is important, it's not a prerequisite to begin testing your product. Jeremy O'Krafka, a professor with the Entrepreneurship and Small Business program at Seneca College in Toronto and the founder of MENTORnetwork.ca, didn't write a business plan until a year after he started his first company. He opted to follow the Lean Startup model, initially proposed by Silicon Valley entrepreneur Eric Ries, which suggests taking your ideas and assumptions to your potential customers before you ever set pen to paper. That way you ensure there's actually a need for your product and you have the chance to make it better.
"You know the plan is going to change rapidly and very often, so you don't want to put time and effort into crafting it," O'Krafka says. "Once you have your product out there, you can learn a lot."
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