Writing a business plan is a time-consuming exercise. For a startup it’s also wasteful. At the same time it’s important to give your startup strategic direction. So how do you find the direction a business plan gives you without that waste?
If you’re a startup founder you have a dilemma. You need to be able to talk accurately about your plans and strategy for the next 12 months, but you don’t have the time to write a 30 page business plan. At the same time you want to find some strategic direction and the process of planning is always very useful. It seems like a no-win situation: either you try and put into words a concrete plan you don’t actually have or you fail to plan and so, as the saying goes, plan to fail.
The thing is, all a good business plan does is outline the three fundamental things you need to know about your business over the next year or so:
- What do you want to achieve?
- How are you going to build your product?
- How are you going to sell it?
So how do you make sure that you do enough planning, but not too much? Put simply you do these three things in the most efficient way possible.
What do you want to achieve?
What you want to achieve and how you want to do it is the essence of your business model. If you were writing a standard business plan that’s where you’d start – but if you’re a startup that’s as much as you need.
Just writing a business model gives you all the benefits of a business plan – namely a strategic view of where your business is and should be in the future – but without all the baggage that comes from writing a full-blown 12 month plan. A good business model lays out:
- The problem you’re trying to solve
- The customers who have this problem
- How you’re solving it
- What you’re doing differently to your competitors
- What your costs are
- How you’re going to make money
- How you’re measuring your success
You should be able to sum each one up in a sentence or two, so your whole business model should be no more than 14 sentences.
That’s how to make a model lightweight, but If you put your 14 sentences in a document on a wiki somewhere it’s still not going to get read by anyone. A great tool for making your business model visible is the Business Model Canvas (BMC). A BMC is exactly what you might think: a canvas covered by your business model. There are various different forms, and nothing to say exactly what your BMC could look like. You could use:
- The classic form – which focuses on your relationships with customers and partners
- Ash Maurya’s form – which focuses on the problem you’re trying to solve and its solution
- Rob Fitzpatrick’s form – which focuses on the so-called “four steps to epiphany”
There’s not a single set form, so choose one of these depending on your unique market and viewpoint. Then make sure you put it on a wall where your team can see it every day.
Do this and you will have condensed your plan into a view action-oriented sentences that help our team to focus and give your new company direction – without all the waffle of a full business plan.
Guerilla Marketing Plan
“Guerilla marketing” has become something of a catch-all, a buzzword that means “some kind of creative marketing”. J Conrad Levinson – who coined the phrase – intended it to mean something much more specific: creative marketing done by a small company that achieves big results. The key thing here is that just like a business model guerilla marketing is focused on results, not documentation. And that means paring creativity with action.
A guerilla marketing plan consists of seven sentences:
- What’s the purpose of your marketing? Is it to get people to sign up to a newsletter, to buy a product, to take out a subscription?
- How will you achieve that purpose? What’s the competitive advantage or USP that’s going to get people to achieve the goal you’ve set for them?
- Who are your target market? Which demographics, psychographics, segments, or verticals are you going to talk to?
- What’s your niche in that market? How do you want to be seen by your target market?
- What tactics will you use? How are you going to get in front of your audience with your competitive advantage?
- What’s the identity of your business? Not your image but the personality and culture you want your target audience to identify you with
- What resources do you have? Not just budget but time and commitment
And that’s it. Your whole marketing plan laid out in less than a page. Of course it isn’t just a case of throwing a plan together in half an hour. It takes time, effort, research, and looking back over your business model. But a guerilla business plan is just as comprehensive as your normal marketing plan, without the padding.
If you’ve had any dealings in software or product development you know how useful planning is for finding a way forward. But with a startup writing out a full roadmap for the next few months is not only not a good use of time, it’s actually a waste of time. If you’re constantly innovating, constantly improving, and constantly creating then you don’t actually know accurately where you’ll be in six months time. It’s also very easy to get fixated on making sure you follow the plan; after all you’ve spent ages on it so you don’t want to throw it away!
Luckily if you’re familiar with running Agile project management you’ll already know about creating a development plan that’s flexible and easy to adapt as you pivot. In an Agile setting you don’t laboriously write down every little detail of your plan, instead you create a product backlog. A backlog is simply a list of features – and the benefits they’ll bring to your users – set out in priority order. There are loads of great blog posts out there about exactly what a product backlog is, but I’d recommend Mike Cohn’s explanation as one of the best. As you finish building a feature you pick the next off the top of the list.
A backlog gives your team enough of a clear direction to start moving but it’s a fluid thing, which means you can change. Most importantly it’s not something you can put together by yourself. Setting out a product backlog is a collaborative process, which is great because it means your team talks about and commits to a plan together.
All three of these methods are regularly used in isolation, but pull them together and you’ll have a great vision for your business and a plan to follow – without the weight and baggage that comes with a traditional business plan.