So you’ve finally made up your mind about what you want to strike out and become an entrepreneur. You’ve dreamt about being your own boss and you’ve read about entrepreneurs who successfully transitioned their business from a startup to a big business and plan to be one of them. So where do you start?
Prepare a business plan before embarking on this grand adventure because, as the saying goes, “you fail to plan, you plan to fail.”.
What is a business plan?
A business plan is basically a written document that plots your course towards the success of your business. The business plan defines your goals for the business and the reason why you believe these goals are attainable. A business plan will outline the steps that you will take as an entrepreneur to work towards those goals. Defining the business’s goal and its strategy for achieving that goal is also important especially if the business plan is being written with a focus on external stakeholders who will hold a financial stake in your company.
Apple Inc., the tech giant whose devices are now found everywhere, did not achieve its success without creating a business plan. The 38-page document, written in 1977 for their initial public offering, defined their early strategy to encourage businesses to buy their more expensive models. Can you believe that they categorized Steve Jobs and Steve Wozniak as some of the risks for the fledgling company? The document tagged Jobs and Wozniak as risks to the company because they are “young and relatively inexperienced in the high volume consumer electronics business.” I say that just makes it true how we all have to start somewhere.
What it should Look Like According to a Top VC Firm?
A well-crafted business plan may well be the best tool to attract funding for your startup. California-based venture capital firm Sequoia Capital is no stranger to assessing the prospects of a business based on their business plans. The company has investments in big tech names such as Google, Apple, YouTube, LinkedIn and Yahoo! just to name a few so it’s wise to listen to what they’re looking for in a business plan.
Brevity. That’s basically the main element that Sequoia is looking for in a business plan. They want the plans presented to them to present all the important information within 15 to 20 slides. The important information to include in a business plan from Sequoia’s view are:
- the company’s purpose
- the problem that the company wishes to address
- the solution that the business has for the problem
- the current trends that favor the business plan
Aside from these important info, the plan should also include data on:
- Market size
- Product lineup
- Business model
- Company’s financials.
A startup’s business plan should point the way to success. Now go ahead, write your goals and strategy and create that business plan, but please, keep it brief and stick to the essentials.