The Messengers front man Stowe Boyd has a new post called, “Writing Tight: Why Tiny Business Plans are Best.” While I tend to agree with Stowe that a short and sweet 10-page plan is the ideal approach, I think that barring ideal circumstances, a 10-page plan is the exception, not the rule. Few can actually get away with it.
The ideal circumstances include three factors: 1) there is solid underlying business model capable of generating revenue, 2) the team has worked together before and 3) the team faces few hurdles (time and money). If all three of these factors are met, a 10-page business plan is perfect for deploying what Stowe eloquently calls an ‘agile’ model. Stowe is one of the smartest guys I know and what he proposes is the ‘best way,’ but it is only the best way for a particular type of startup.
I think of it in mountaineering terms. With the proper skill and experience the ‘best’ approach to climbing Mt. Everest is to go fast and light. However without the right team, resources and genetic makeup, light and fast is also the surest route to disaster. From what I have seen over the 15+ startup business plans I have worked on, this ‘ideal’ scenario is rare.
Why a 10-Page Plan Will Not Work for Most Startups.
There are two reasons a 10-page plan will not work for startups that fail to meet these ideal circumstances. First, few people (even with expert help) have the discipline to write the type of plan Stowe has in mind. Most people rush to get a business plan out of the way, treating it as a mindless requirement rather than as an opportunity for learning. Business plans are wrongly viewed as commodities that anyone can write. Most people can’t compose coherent emails, let alone articulate business strategy documents. It may even be helpful to have your executive summary written by someone else entirely.
Second, a 10-page plan only focuses on 50% of an entrepreneur’s ‘real issues.’ In general I agree that business plans are ‘living documents’ – the model and approach will change, maybe frequently. To that extent, investing a lot of time in writing strategy doesn’t make sense. However, it has been my experience that as important as addressing strategy (i.e. the business model) is creating what I call an ‘operational’ or ‘marriage’ plan.
Traditionally before a couple is married, the priest, rabbi or minister performing the ceremony invites the to be couple ‘in for a chat.’ During this chat the minister will ask about future plans for kids as well as how the couple will handle money – difficult questions. The questions are purposefully difficult because many couples knowingly overlook engaging in difficult dialogue with one another during the honeymoon stage. However it is these difficult questions that ultimately make or break the marriage. (If you like the marriage analogy, here is more).
Particularly in today’s age with ever younger entrepreneurs bootstrapping their development costs and dividing up labor responsibilities (while working two, or more jobs mind you!), understanding timelines, responsibilities and milestones is critical to the company getting off the ground. This is where the marriage plan comes into play.
If you are a startup looking to construct a plan my advice is to create at a minimum the two types of plans mentioned above. I would also construct a visually appealing PowerPoint (with mockups) of 10 slides or less based on your written plan. Finally (and I cannot stress this enough) forget trying to be ‘stealth’ or secretive. Tell as many people as you can about your idea and actively solicit (and listen to) feedback. Having the discipline to actively collaborate and research a business plan with your team is the surest sign that your startup is on the right track from the get-go.
Updates: B5Media Article