“Plans are worthless, but planning is everything.”—Dwight D. Eisenhower
The business plan (25 to 35 pages) provides the details of your venture. Use the business plan with an executive summary to communicate effectively with various stakeholders including potential investors, partners, customers and employees.
The business plan and other business documents will change over time. Make sure you refresh your business plan on a regular basis to ensure that you capture key changes in your business. A business plan offers the added benefit of encouraging your team to work together and put all of your intentions in one document.
First build your pitch deck with the key sections and then use it as an outline and foundation for your business plan. The process of putting the plan on paper will help to make the venture more tangible and concrete. The process is more important than the paper document itself. Have key advisors, mentors, angel investors or trusted friends provide feedback on the first draft of the pitch deck and the business plan.
The business plan is one of the least important factors in raising money. If an investor is leaning toward a positive decision, then the business plan only reinforces this feeling and was not responsible for making your case on its own. On the other hand, if an investor is leaning toward a negative decision, then it is highly unlikely that the plan will change his or her mind—the investor is not likely to read the plan.
So, if the business plan is not the crucial document for raising money, why write one? There are several reasons:
For further details and support on developing a business plan, download the MaRS workbook, The Business Plan and Executive Summary. The information and exercises in this workbook guide will provide a framework to help you organize and articulate your thoughts.
Business Development Bank of Canada. Effective business plan. Retrieved April 8, 2009, from http://www.bdc.ca/en/my_project/Projects/consulting/cs_business_plan.htm, now available at http://www.bdc.ca/EN/solutions/consulting/Pages/cs_business_plan.aspx.
Kawasaki, G. The Zen of Business Plans. Retrieved April 8, 2009, from http://blog.guykawasaki.com/2006/01/the_zen_of_busi.html.
Kawasaki, G. (2004). The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything. Toronto: Penguin Canada.
Kawasaki, G. (2008). Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition. Toronto: Penguin Canada.
Cardis, J., et al. (2001). Venture Capital: The Definitive Guide for Entrepreneurs, Investors, and Practitioners. Toronto: John Wiley& Sons.