A few years back a friend and I started a non profit organization that had zero success and died over the course of its first year. The reason for its failure was very simple.
We didn’t know where the money was going to come from.
Our idea was sweet and altruistic, but we did’t have the know-how to raise money when there is nothing to sell.
All the same, my experience starting that business was great. I enjoyed every step of it. Well, almost every step.
In order to apply for non profit status we created a complete business plan. Pages and pages of information on how we planned to run every single aspect of the organization. This process took so long and was exhausting. I review those pages now and see how some of it was too much for a small organization that plans to grow at a slow pace.
In retrospect we probably started with a template that was too elaborate. Too long. And we spent too much energy trying to make it sound professional. Using complicated words and elaborate sentences that took too long to draft.
So when I came up with this idea I dreaded the business plan phase.
Up until the day I read on reddit the story of this guy who started a subscription business with a one page business plan from 100startup.com. This made much more sense to me. It was a great find.
I don’t plan to look for investors or loan money. I plan to grow slowly and learn from my mistakes as I go along. I value the importance of a business plan and it’s ability to challenge you to think about all the aspects of your business. But I wanted to start with something shorter, more to the point. With short and clear sentences free of jargon and complicated ideas.
Something that can grow as my business grows.
I made some adjustments to the original document from 100startup.com and so far my version is 9 pages long. It includes everything I felt I needed to dig deeper on my idea.
Some ways in which a business plan (albeit shorter) is useful even for startups who aren’t interested in investors or lenders are:
- to understand the framework of the business idea. It’s audience, what they want, what frustrates them.
- to get a clear understanding of your solution to their problem and how yours is different/special than everything else out there.
- to create a clear message of the offering you will communicate to your audience – or at least to start working on it. I’m not at a place where I feel like I know how to effectively communicate my idea yet. But I’m working on it
- to start jump start the business financials. To create systems that will help you calculate the cost of starting up, the cost of running your business for the first year, the cost of creating your products and market them, and a means to measure success
- to brainstorm additional ways in which you can create revenue aside form your main product or service.
- to begin to come up with ways in which you can over deliver and add value to your product or service
- to begin the process of creating a marketing strategy
I read my business plan document often and make changes to it as I go along. I’ve saved every version to compare how it evolves overtime.