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It is one of the most important documents an entrepreneur has to come up with, literally providing the rationale for a start-up's existence. So do put your thinking cap on when you write out a business plan.
This and the next few columns will talk about what is probably the most important document an entrepreneur will deal with, outside of a last will and testament - the business plan. A business plan gives birth to the start-up. It enables the entrepreneur and the team to envision and plan how the business will be run and how funds will be raised. It addresses the needs of both the investors and the entrepreneurs because both have a similar objective-creating a successful business.
The business planning process can be quite complicated, just as the writing of the plan itself. Determining the appropriate form of the plan - what topics to put in, in what order, and with what emphasis - is important. However, what is even more important is the content. The content should convey an intimate understanding of what will make the business succeed. Investors don't throw money at glossy plans, so one needs to focus more on substance rather than form.
There are two basic types of plans: a 'general planning and funding' document that is useful at the beginning of a business and to raise funds, while an 'operational' business plan is used to monitor and control the growth of the company. In start-up situations, it is the general planning and funding document that is of importance. This plan is usually written during the concept stage before any outside funding is received. Most plans are, in fact, written while the entrepreneur is still employed. In the start-up culture of Silicon Valley, almost everyone has two jobs: the regular 9 to 5 job that pays the bills and the other(s) from 5 to 9 that will hopefully, some day, result in doing away with worries about bills!
So, when do you write the plan? Your boss is unlikely to give you time off to write a plan for your start-up (unless, of course, he's part of it), so the obvious answer is that you need to take the time and energy to write the plan while you are still employed. However, make sure that there is no conflict of interest or commitment. You will need to conduct research, talk to potential customers and investors and, in general, understand the market.