From “How to Write a Great Business Plan” by William A. Sahlman. Harvard Business Review, July-August, 1997.
Jeremie Spitzer and Paul G. Silva talked to us about their experience creating a business plan for Zform, a software entertainment company that creates fully accessible games for both blind and sighted communities.
Spitzer says that before actually sitting down to write the business plan for Zform, he hadn’t thought at all about marketing. He soon realized that he needed to do some research and identify the competition.
“Don’t just jump into a new venture [without planning] because you will drown in the small details and won’t even realize that you’re way off base. A business plan forces you to think of all the details that you wouldn’t normally think about. When you write your plans down on paper, you have to be clear. The process of writing forces you to work out the details.”
Spitzer emphasizes that there is no such thing as a final plan. “You need to accept and be comfortable with the fact that your business plan is a live document that will always be changing.”
Silva suggests looking to others for advice. “Planning is essentially answering questions that have already been laid out for you by people that are experienced and know exactly what will hurt your venture if you don’t plan. The process of planning was ten times more valuable than the actual business plan itself.”
Silva believes in learning from others’ mistakes. He regularly reads the “Postmortem” section of Game Developer magazine, which talks about games that have failed and why they have failed.
Silva advises new venture seekers, “Talk to an industry veteran who has experienced failure, and ask why.“
Another viewpoint on business plans comes from Phyl Speser of Foresight Science & Technology. “Most folks will disagree with me, but I think [business plans] are highly overrated. Boeing never had a business plan until late in the last century. They knew what they did: they built airplanes. If you’re going out for venture capital money, you need a twenty+ page plan. If you’re not, you usually need a much smaller one. Essentially, you need as much of a plan as is necessary for your team or your investors. Otherwise, don’t waste the time.”
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ISBN: 978-1-118-72622-8
September 2013
John McAdam
A strong business plan greatly increases a business chance of success, especially in an economic environment in which more than 50 percent of businesses fail within three years. Your business plan can serve as a foundation for your successful business. The One-Hour Business Plan , written by seasoned entrepreneur and business instructor John McAdam, helps you lay that foundation. With the help of this book, aspiring entrepreneurs can write a viable business plan in just one hour.
The One-Hour Business Plan outlines a process and a framework for creating a business plan that sets you up for success. Give your business the best odds for success, in just one hour of your time.
JOHN McADAM has decades of businessexperience as a hired CEO, serial entrepreneur, and instructor. He holds an MBA from the Wharton School and has taught strategic business planning at the Wharton Small Business Development Center for years. Quoted in business publications such as Inc., Success, Crain's New York Business, Business News Daily, and Wharton Alumni Magazine, John McAdam also speaks for organizations, having been a frequent radio guest and guest speaker on NBC10 Philadelphia Small Business Week and Money Matters TV. To book John McAdam, visit http://planfoundations.com.
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By Stacey Ross Cohen Edited by Chelsea Brown Aug 30, 2024
Opinions expressed by Entrepreneur contributors are their own.
Every entrepreneur's journey is unique — there's no one-size-fits-all path to success. There is, however, a proven sequence of steps that can turn your idea into a thriving business . I've seen this process unfold firsthand, launching my first business at age 14, and currently as an angel investor advising numerous startups. Let's dive into these essential steps.
Every entrepreneur dreams of success, but defining what that means for you is the key to making it a reality. This step is crucial as it empowers you to take control of your entrepreneurial journey. Reflect on what success looks like for you, considering your goals, risk tolerance, market dynamics, competition and more. Assess your passions, skills, limitations and resources — and then follow a course that makes sense. Will this be your supplementary or primary source of income? How big do you want to grow? Are you seeking profits, impact or something else? Answering these questions thoroughly and honestly will allow you to lay a strong foundation for success.
Related: 4 Steps to Moving Beyond the 'Lightbulb Moment' and Turning Your Idea into a Thriving Business
The most successful startups solve problems that haven't been addressed yet, often by being disruptive or pioneering a new category. If your idea doesn't solve an apparent problem, it's time to return to the drawing board. Identifying a need goes beyond casual observations or gut feelings; extensive market research like interviews, focus groups and audience development is essential to uncover your potential customers' needs, desires and pain points. Combine this research with networking and deep conversations with industry experts and investors to further validate your ideas. Only after thoroughly understanding your audience should you start building a proof of concept or minimum viable product (MVP) that brings your idea to life.
A prime example is Julia Haart, serial entrepreneur, fashion icon, author and Netflix reality star who founded +Body, a body-positive, technologically advanced shapewear brand in 2023, with a second collection debuting this Fall. A disruptor at her core, Julia revamped the first collection after conducting extensive market research and gave customers what they wanted — a lower price point, four levels of compression and "ready to wear" shapewear staples like t-shirts, tank tops and bodysuits. She continually welcomes feedback to refine her products and stay connected with customers.
Impatient and unseasoned entrepreneurs often rush to this step, but success requires a solid foundation and clear understanding of the need before moving forward. When it's time to build, follow these vital steps to bring your idea to life:
Select a name: Don't rely on hunches. Draw on market research and focus on options that are short, memorable and SEO-friendly. For inspiration, consider using tools like ChatGPT or other generative tools.
Choose a structure: Picking the proper business structure is critical, as it impacts everything from taxes to liability to daily operations. The four most common structures are sole proprietorships, Limited Liability Companies (LLC), corporations and partnerships. The simplest and most common is a sole proprietorship, where one person owns the business but is personally liable for its debts. An LLC offers more flexibility with liability protection and pass-through taxation. A corporation is a more complex structure where the business is a separate entity from its owners. S-corporations provide pass-through taxation with a cap of 100 shareholders, whereas C-corporations allow unlimited shareholders but face double taxation. A traditional corporation offers limited liability protection and the ability to raise capital through stock and bonds, but like C-Corps, it is also subject to double taxation. Lastly, partnerships involve two or more individuals sharing ownership and responsibilities, with options for general or limited partnerships.
Protect your brand: Make sure you're buttoned up: Compliance with all relevant federal and state laws, regulations and industry standards is essential. Obtain licenses and permits, study local labor laws, and prioritize data privacy . Safeguard your intellectual property through trademarks, patents and copyrights, and strongly consider using nondisclosure agreements (NDAs) to maintain confidentiality.
Build the plan: A detailed business plan is indispensable for establishing structure, attracting investors and setting the stage for success. Carefully outline your topline goals and strategies to specific operational structures and financial projections. HR considerations like staffing, compensation and benefits are also integral to a business plan. And remember: Marketing and communications should never be an afterthought. These elements are vital to business success. If you are new to writing business plans , resources like SCORE and HubSpot offer excellent templates.
Related: How to Design and Produce Products from Scratch — A Step-by-Step Guide for Entrepreneurs
The moment has arrived to introduce your idea to the world. Now is the time to roll out your sales and PR strategies and acquire customers. Implement competitive yet profitable pricing, and establish key performance indicators (KPIs) to track progress. Ensure you're also cultivating a positive company culture by prioritizing values like collaboration, innovation and a customer-centric mindset. And don't forget to celebrate! Host a grand opening event, and invite business leaders and local dignitaries to mark the occasion in style.
A steady cash flow is the lifeblood of any successful business, but it doesn't come automatically. Start with ample cash reserves, and pursue profits to avoid relying on short-term loans. When I launched my marketing agency, my first hire was a bookkeeper to ensure financial health. I highly recommend bringing in an accountant or bookkeeper from day one to help manage your finances and keep your business in the black.
Every entrepreneur's journey is unique, and there's no way to anticipate each challenge or opportunity. The above steps are relevant across the board — so take note, invest all the necessary time and energy, and prepare to turn that idea into an empire.
Related: Why Being Profitable is a Business Strategy in Itself
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Pitch, Plan, & Track Your Business Plan From Start To Finish. Start Today! Create A Strong Business Plan for Any Industry Without the Wait, For Less Cost.
The Importance of a Business Plan for Entrepreneurs
How To Write A Business Plan (2024 Guide)
How to Prepare and Write the Perfect Business Plan ...
Good management requires setting specific objectives and then tracking and following up. As your business grows, you want to organize, plan, and communicate your business priorities better to your ...
How To Make A Business Plan: Step By Step Guide
How to Write a Business Plan: Guide + Examples
1. Create Your Executive Summary. The executive summary is a snapshot of your business or a high-level overview of your business purposes and plans. Although the executive summary is the first section in your business plan, most people write it last. The length of the executive summary is not more than two pages.
In business, you do not want to wing it. You want a plan -- a document that lays out the path of your company for the next three to five years so you can see the route to your goals and know ...
How To Write A Business Plan | Entrepreneur.com
When you write a business plan is essential for any entrepreneur or business owner. It provides a roadmap for the future of your business and helps you communicate your vision to potential investors or partners. Creating a compelling business plan can also help you identify pitfalls and opportunities, giving you a better chance at success.
A business plan can help you in the following ways: Clarity of vision. A well-crafted business plan serves as a roadmap, providing clear direction for the business. For instance, an organic skincare brand can use a business plan to detail how it will source ethically-produced ingredients and establish partnerships with eco-conscious retailers ...
Importance of Entrepreneurs to Assists in Team Building. A business plan holds great importance for entrepreneurs in assisting them with team building, as it provides a clear framework for recruiting, developing, and managing their team effectively. Entrepreneurs can use a business plan to aid in team building by defining roles and ...
Don't tell yourself that in two years, if you don't have "x" in profit, this is a failed idea. Plan for shortcomings, write down ideas to help you pivot and keep reassessing your industry for ...
Let's take a closer look at how each of the important business planning benefits can catapult your business forward: 1. Validate Your Business Idea. The process of writing your business plan will force you to ask the difficult questions about the major components of your business, including: External: industry, target market of prospective ...
4. Attract funding. 5. Improve your skills. 6. Here's what else to consider. If you are thinking of starting your own business, you might be wondering if you need a business plan. A business ...
To outline the importance of business plans and make the process sound less daunting, here are 10 reasons why you need one for your small business. 1. To help you with critical decisions. The primary importance of a business plan is that they help you make better decisions. Entrepreneurship is often an endless exercise in decision making and ...
Determine how you can best reach potential customers. Evaluate your competition. Your marketing plan must set you apart from your competition, and you can't stand out unless you know your ...
MacMillan: The idea of the business plan is to convince the stakeholders. First, what we need to do in a business plan is show that we understand the needs — the unmet needs — of potential ...
10. Have all the information in your plan when you're ready to sell. Sell your business when it's time to put it on the market so you can help buyers understand what you have, what it's worth, and ...
A well-crafted business plan is critical to your success as an entrepreneur. Here are a few ways a business strategy can help you: 1. Strategic Direction: A business plan compels you to articulate ...
Published Aug 14, 2023. A business plan is essential as an entrepreneur. It helps you set clear goals and guidelines for how you will manage your business. A business plan may also be needed to ...
A business plan forces you to think things through early; it ensures you have well-defined venture goals. Clear goals help generate a clear path for you and your team to follow as you begin to implement your venture. The executive summary is a 2- to 5-page section that summarizes the plan's main points.
Being realistic is important because it lends credibility to your presentation. Always assume things will take 15 percent longer than you anticipated. Therefore, 20 weeks is now 23 weeks. 6. Be ...
A guide to writing a successful business plan—in just one hour A strong business plan greatly increases a business chance of success, especially in an economic environment in which more than 50 percent of businesses fail within three years. Your business plan can serve as a foundation for your successful business. The One-Hour Business Plan</i>, written by seasoned entrepreneur and business ...
3. Develop your product. Impatient and unseasoned entrepreneurs often rush to this step, but success requires a solid foundation and clear understanding of the need before moving forward.