April 14, 2012

Startup Success Step #3

Every business plan is fiction.

The very idea of a Year 5 Sales Volume Projection for a company that hasn’t opened its doors yet is clearly an amusing fantasy, but there it sits (lies?) in that time-honored novella, the business plan.

If it’s a fantasy, is it still worth doing? Of course. The exercise of committing to paper a coherent document, with objectives, strategy, tactics, SWOT – and a bunch of bloated numbers – is a useful ritual. This exercise of diligent planning to fill in all the blanks, tick off the required boxes, is a solid discipline to avoid overlooking potential disasters.

Sophisticated investors, on the other hand, may pay less attention to the numbers than to the management team, concept, market and competitive environment. The net net is that how your branding relates to your target segments may weigh more than any spreadsheet proving you’ll take 7.34% of the market.

Jump to the next in this 16-part series, or start at the beginning.