When I quit my last job to start Me_tail I quickly established that I wasn’t going to survive working on my own for an indefinite period of time either financially or mentally without setting clear goals and milestones. It is a lonely life starting something on your own and the change for me from a very busy job of constant crisis, project and people management to zero emails a day was extremely difficult. I had got addicted to work stimulus, which is not surprising as looking back on my year my team had delivered 75 projects.
So the first thing I did was to set myself the major goal for writing a business plan and minor goals for doing all the business setup admin, like incorporation, bank accounts, web domains etc. I gave myself a strict two weeks to write the first draft incorporating all the research I had gathered along the way and new research I would need to gather to fill holes as they appeared. My aim was then to distill that plan into a one page executive summary I could then take out and show to people to test the validity of the ideas and hone my thinking.
One of my favourite phrases is ‘work expands to fill the time’ and certainly that is very true of a business plan. You can take as long as you like to write one, but the key is to focus on key goals, milestones, deliverables and how they are to be achieved. Even if the business plan never gets read it will serve as a stake in the ground against which you can refer to from time to time to check your thought processes and the quality of your planning and thinking. This is why I like it and think it is crucial, even though many if not most businesses today are started without one. It also serves to ensure that you back up all your hypotheses with facts and figures, so that when you do get those questions from potential investors you have a response.
Make your life easier by finding a template on the world wide web from the gazillion business plans out there. Search for a few and then use the best one to match your business. No point trying to reinvent the wheel unless your business is perhaps creative design led. Better still, also try to get hold of a plan from someone who successfully did get funded. Network your way to one. People will generally be happy to oblige. I myself started from a template. Thereafter the plan went through 30 revisions to get to the one signed off by the board earlier this year.
Also, when you start writing your business plan, start thinking about timelines and milestones and breaking tasks into bite-size chunks. What do you need to do to get initial funding, customers and revenue. You should think of this as what you need to PROVE to investors and customers rather than a case of my idea and company is great, so ‘Show me the money’.
Aaron Patzer, the founder of Mint.com delivered the perfect startup strategy from start to exit based on this principle of delivering to measurable milestones and achieved a $170m exit within in 3 years. Now for 99.999% of startups this is not going to happen, but the lessons here should be heeded by all internet tech startups. Raise the right level of money to deliver a prototype that will prove the concept. Then raise the next level of money that will help you prove revenue, at which point you raise money to scale the business. It is as straightforward as this:
One of the things I quickly learned was that there was a lot I didn’t know despite having worked in several startups. There were three ways to solve this, either scrabble around in the dark on Google, hope that the problem would go away over time or find someone who might know. Categorically, finding credible advice is the fastest and best solution in every case. You don’t have time to be an expert in everything, especially if you want to achieve your milestones and deliverables that are going to veer towards the latest of the latest version of your ‘conservative’ estimates. Therefore if you want expert advice to minimise mistakes and execute the plan get expert advice. I experienced to my pleasant surprise that most of the time you can get it for the price of a coffee, with the added benefits of reducing the loneliness of the entrepreneur, adding emails to that empty inbox and adding a new stimulus addiction….