In continuation of my latest blog topic, start-up business essentials, the focus of this post is on the all-important business plan.. I hear a lot about business plans in daily life, but due to most start-ups’ understandable need for confidentiality, I rarely get to read other people’s business plans. So, when I started doing researching and organizing our business plan, I only had two examples and they were very different from one another.
Example 1: Undergraduate Senior Project
At my alma mater, the Business program is seen as the second most academically demanding course of study behind Pre-Med. This was primarily because of one class: Business Ethics, Strategy and Policy. The class was one of two capstone courses that all business majors were required to take senior year, and it was the single most demanding business class at Pepperdine. For the last six weeks or more of the course, teams worked together to write and pitch a business plan to a panel of professors and alumni. Armed with Red Bull and coffee, my partner and I were in charge of researching and composing the 20-plus-page section describing the internal operations of our desired start-up. In total, the business plan was over 250 pages with about 10 pages of footnotes. It was massive and the Power Point that we created to go along with it was equally massive. We were all exhausted after the final presentation, but it was an amazing experience.
The problem, I found out later on, with this type of business plan is that it is not necessarily “realistic.” Yes, all business plans need research and footnotes, but since there were about 10 of us, we really dug into the details, methodology and references. We got so involved in the details that at times I had to keep reminding myself of the goal and the purpose of our proposed start-up business. More and more it felt as though I was writing a paper to defend the operations and logistics and less about just laying out the flow of the goods from ideation to consumer.
Example 2: Ariel Investments
After my sophomore year of college, I came home to intern in marketing at Ariel Investments. Ariel is a large mutual fund management firm that manages money for individual as well as institutional retirement funds. I loved observing how and why Ariel’s investment gurus selected the stocks they did to invest in and I enjoyed seeing how the funds were then pitched and sold by the Marketing team. It was a great learning experience and an internship like no other. The funny thing is they kept pictures of the Ariel business plan on site. The founder of the company wrote the business plan on a McDonalds napkin while he was eating lunch there. There were no fancy flowcharts, SWOT Analyses or Venn Diagrams, simply pen ink and a greasy piece of paper.
This business plan, although sufficient for Ariel since it became an incredible success, may not be enough for your start-up which may need significant outside investment and funding.
I wanted to highlight these two examples because they framed my perspective on business plan styles. Simply put, those starting their own ventures should try to find a middle ground between these two examples that works for them. Don’t get so bogged down in the details that you delay your launch; yet don’t be so casual about planning that you spend valuable time later on having to iron out the details. Find that perfect balance for you so that you can know exactly where you are going, why and how you will get there.
I have copied below a quick and dirty business plan outline I share with a high school business class I mentor. It recaps the nuts and bolts and seems to be a good framework. I’d be interested in your thoughts. Feel free to leave a comment and let me know what you think might be missing or what you found helpful in creating your business plan. Thanks as always for following along and have a great day.
Planning and looking ahead in life is essential. It is hard to view in this photo but there is a (for my standards) HUGE spider in the middle of this hallway. It is very hard to see. If I had not looked up and taken a second to see where I was going, I would have run face first right into it.
“Many are the plans in the mind of man, but it is the purpose of the Lord that will stand.” – Proverbs 19:21