When it comes to writing business
plans I learned the ropes the old-fashioned way: my choices were to either
write a successful business plan or find a new job. During the dot-com era, I
was the sixth employee hired by a promising Swiss startup. I was employee
number six, hired to head up marketing and communications.
Day two on the job, I was
informed that we were going to run out of funding in about 4 months. As the
only employee fluent in written English, my job description immediately expanded
to include writing a business plan that would raise enough venture capital to
keep us in business beyond December. It was…daunting.
It was also a huge learning
experience, and today, years later (and 30 million Swiss Francs of funding
raised), I’m going to share a few of lessons I learned.
First, be brutally honest with
yourself about what your company goals and objectives really are. A great
starting point for me was to revert to Journalism 101and envision my plan in
terms of the five w’s – who, what, where, why and when – and the one h, how. Using
this exercise to organize your thoughts about your business is helpful even if
you’re not tasked with writing a plan.
Another lesson I learned, also
applicable across a wide spectrum of business situations, is to respect and
acknowledge what you do not know. The story of your business needs to be told
in a compelling fashion that showcases your unique value in the market but also
remains grounded in the reality of the business world of P&L’s. I knew I could
put together a business case with words, but I needed a financial wizard to
crunch the numbers and answer the tough financial questions that investors would ask. We hired a CFO a week later.
Depending on the level of funding
you’re seeking, financial data can include P&L information, sales
forecasts, cash flow data and a firm and clear plan on how you intend to pay
back loans. Your plan also needs to include an in-depth competitive analysis to
quantify your company’s market penetration and market opportunities.
Here’s the tricky part. You run a
business that you cherish. You are involved, and passionately so, in every
aspect of it. And yet, this is a good time to let go and hand some of the heavy
lifting over to the pros. At my startup, we made a considerable investment in competitive
analysis, which paid off.. A friend, on the other hand, did not; he’s one of
the most phenomenal bakers in his city, but kneading the dough and expanding a
business nationwide are two different things.
Instead of investing in outside help, he tried to manage it on his own.
But, like many of us, amortizing expenses and organizing and presenting
financial data is not his strong suit. Again, know when to let go.
Finally, make peace with the fact
that your business plan is never complete. Like your company’s resume, it needs
to be ready to be presented at a moment’s notice, and it needs to be current. At
my startup, we went back and revised and updated the plan every time anything,
large or small, changed.