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Writing a Business Plan

Lean Business Planning

  • Build a plan on one page
  • Answer basic questions
  • Execute: launch your minimum viable product
  • Repeat

Lean Planning Questions

  • Define the problem you solve
    • Describe what customers do today to solve the problem
  • Describe your solution
  • Clarify your unique selling proposition
  • Note your unfair competitive advantage
  • Identify Customer Segments
    • Pay special attention to early adopters
  • Note sales channels and marketing strategies
  • Define metrics you’ll use to measure success
  • The bumper sticker summary

Business Plan Overview

  • All entrepreneurs should take this course
  • You need a business plan when someone asks for it
    • Raising money through crowdfunding, from angels or VCs
    • Applying for a bank loan
  • When you don’t need a business plan
    • Starting a business
  • Lean Business Planning
    • One page overview
    • Execute, review, revise and repeat

Purpose of a Business Plan

  • Define the problem
  • Offer the solution
  • Identify the customer
  • Explain how you make a profit

If It Ain’t Broke…

  • No one will pay you to solve a problem they don’t see as a problem.
  • If you already have paying customers, you’re solving a problem.

Solve a Bigger Problem

  • In general, the bigger the problem, the bigger the opportunity

Tips for Describing the Problem

  • Be honest
  • Be clear
  • Be focused
  • Be succinct

Match Your Solution to the Problem

  • Your solution should match the problem you identify as well as the pants match the jacket of a business  suit
  • If there is a mis-match, go back and redefine the problem or the solution to create the match

Tips for Describing Your Solution

  • Focus on clarity
  • Challenge: when describing something new your audience will:
    1. Leap to false conclusions,
    2. Fill in gaps with their experience
    3. Miss your point entirely
  • Support words with images and video
  • Avoid broad, grand words in favor of specific, focused ones

Identify Your Customer

  • The problem and solution both lack meaning without a customer
  • Avoid broad customer definitions like:
    • Everyone with a cell phone
    • Women over the age of 18
  • Seek narrow definitions focused on your early adopters
    • Affluent women between 50 and 65 years of age
    • Unemployed teens in upper income households
    • Male college students at public universities
  • Get to know your customers

One Sentence Summary

  • Create a customer-focused, one-sentence summary of your business plan.
  • This will become:
    • The way you introduce the business to people at cocktail parties
    • The first sentence of your business plan
    • The first slide of your PowerPoint pitch
  • Be clear
  • Don’t say:
    • “We make the world more beautiful for everyone through horticulture”

…if it would be more accurate to say…

  • “We mow lawns for affluent people in this particular Place in the world.”

One-Sentence Template 1

See if your one sentence summary can fit this model:

  • We solve [this problem]
  • By doing [this activity]
  • So that [this outcome results]
  • For [our well defined customer]

The order is not especially important

One-Sentence Template 2

  • We do _________ for __________ so that they ___________.
  • You define your activity in terms of your customers and their outcomes
  • For example:
  • We manage the apps on smartphones for people who download lots of application so that their phones’ memory, storage and batteries are optimized.
  • Note that the problem definition in this example is implied

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