Patrick Vernon is a good friend who also happens to be the Clinical Assistant Professor of Strategy and Entrepreneurship at UNC-Chapel Hill's Kenan-Flagler Business School. His is the final of three posts for National Write A Business Plan Month.
A Contrarian Response from a Guy Who Teaches
How to Write Business Plan
I’m told that December is “Write a Business Plan Month,” but I’d like to encourage the creators of this promotional concoction to rethink it. The number one mistake I see in business plans is that they were written in the first place. Or I should say, written too soon. Many people mistakenly believe that the act of writing is synonymous with the act of planning.
It is not!
If you have a great idea for a business, you have a lot of work to do before you ever pick up a pen or open your laptop. Here’s what you should do instead:
Activity #1: Google it.
Brainstorm any keyword that might be used to describe what you want to do and search the world over for someone else who has already tried it. More often than not, they are out there. Finding them is good and bad news. Good: it validates your idea. Bad: you may have a hard time competing. Either way, better to find them earlier than later.
Activity #2: Talk to people—any people—about your idea.
The goal here is breadth. Our world has become very complicated, and you need insights from a wide variety of people that your new venture would touch: customers, competitors, partners, suppliers, investors, co-founders, employees, landlords, etc. This may seem counter-intuitive if you believe your idea is amazing and that others may steal it. While that could be a risk, there’s an even bigger risk that you are going to write a useless plan based on unfounded claims and ill-informed hypotheses. You need to become an expert, and the only way to do that is to talk to people. Oh, and don’t forget to call the folks you came across in Activity #1. [Tips for surveying customers here]
Activity #3: Get quantitative with your conversations.
The goal here is depth. After talking to many customers, competitors, partners, etc., you’ll begin to identify your major challenges. Now you have to figure out how to overcome those challenges. One thing that can help (or at least support your claims) is objective data. You think the world needs a new flavor of ice cream? How about you do a few hundred taste tests and let me know how that works out. Think physicians need better software for tracking appointments? Convince me that more than 50% of the ones I know would say yes. You get the picture.
Writing is an insular activity. Planning a business should be the opposite. So let’s rename December, “Test the Feasibility of Your Business Idea Month” or “Take your Idea Out of the Building Month” and don’t write anything!
Check out the other posts: