Last year my team and I won the best written business plan in Asia during the Asia Venture Challenge in Thailand.
Still I’m telling you that you should Burn Your Business. Why?? Because it’s the biggest waste of time. It takes you at least 1 month to finalize a business plan. Instead, you can build a prototype of your product and get feedback from real customers. Some startups even manage to build their whole product in one month, and start making money!!! A business plan is an execution plan that is static, hard to modify and full of assumptions. While a Startup should be dynamic, easy to change and based on validated assumptions.
In a business plan you are assuming you know everything. You know your market, customer need, how many people you need to hire and how much money you are going to make within the next five years!!!! So based on your magical business plan you start hiring, building and investing tons of money all based on assumptions. I have a bad news buddy, “No Business Plan survives first contact with customers”, Steve Blank. That’s soooooooo true.
But, you’ll say business plan makes me understand my business and prepare me for different scenarios. That’s true, but we need to understand that in a startup you are searching for a business model not executing a business model. Business Plans are execution plans and they are originally built for large companies with pre-known customer needs, customer segments and market. In a startup we are still not sure about our customer needs, our market, our revenue model and our cost structure.
So what should we do, no planning at all?? No you still need some guidance and here comes the Business Model Canvas to save us. Business model canvas is a dynamic and agile tool that help startups to understand their business model and guide them to validate all of their assumptions. It is easy to understand, easy to use and makes it easy to do major changes in your startup . It also pushes you to go out of the building and talk to your customers, your suppliers and your partners.
Trust me, Burn Your Business Plan and start using the Business Model Canvas instead.