Elementary Startup Planning: Financial Models and the Path to Profitability

SIBP-Blog-NEW-B-2We’ve all heard the stats about business failure. According to some fairly reliable sources, as many as 8 in 10 businesses will fail within the first 18 months. But that statistic doesn’t tell the whole story. Many of those businesses were doomed to fail long before they ever opened their doors. Why? Their founders had no idea how the business was actually going to make a profit.

In my last post, I stressed just how important the financials are when planning a new business. The better your understanding of your path-to-profitability, the easier it is to both communicate and implement that plan. Continue reading

Elementary Startup Planning: Why Financials Matter

SIBP-Blog-NEW-B-5A few weeks ago, I was talking with one of the first-time entrepreneurs I mentor as a Kauffman Foundation Entrepreneur In Residence. As we were working through the details of getting them ready to start their first funding round, they asked me a really great question.

“Tom, if you were starting a new business today, what is the first thing you would do?”

As I started to think about the answer, I found myself getting really excited. Even without having a specific business concept in mind, my mind was flooded with some great ideas for getting a new business off the ground. At the same time, the answer to their question was obvious, because every plan I could come up with was built on the same cornerstone: Getting the financials in order. Continue reading

Alternatives To A Longform Business Plan

SIBP-Blog-NEW-B-3Great business planning has a lot of moving parts. The more you can nail down things like your value proposition, your business model, and your go-to-market strategy, the easier it will be to you to be successful. There’s even that all-important detail of how your business will actually manage to turn a profit. The idea behind a business plan is to answer all of these questions in a single, relatively easy to read document.

But is a narrative business plan really the best option? To answer that question, it helps to understand the audience. Who will be reading this business plan? Will it just be investors and lenders, or is this something you’ll be showing to potential co-founders or high-value employees? What kind of document will give those people the information they need, and in the easiest-to-digest form?

Is a longform business plan really the best document to use in all cases, or are there better options available? Continue reading

Taking The Pain Out Of Creating A Longform Business Plan

SIBP-Blog-NEW-B-2Creating a successful business sometimes means doing things that aren’t the most efficient or effective use of your time. If you’re working with commercial lenders, old-school angel investors or partners who prefer traditional approaches, it’s entirely possible that they will ask you to write up a business plan before moving forward with them. As I mentioned in my last post, while I’m a huge believer in business planning, I’m not a fan of longform business plans.

If you find yourself in this situation, it’s usually easiest to just bite the bullet and create one. The more business planning you’ve already done — perhaps using something like the business model canvas — you should already have most of the building blocks in hand to create a narrative business plan. Continue reading

Why Business Plans Are Bad, But Business Planning Isn’t

SIBP-Blog-NEW-B-5One of the questions I’m most frequently asked as a business coach is “Do I really need a business plan?” It happens once every few weeks, and I’m asked by surprising variety of business owners, startup founders and soon-to-be entrepreneurs. Unfortunately, I still don’t have an easy answer, and by trying to provide some context for my take on the subject, I’ve gotten something of a reputation as a business-plan skeptic.

It’s time for me to set the record straight: I’m a huge believer in business planning, but I’m not a fan of business plans. If that sounds strange to you, allow me to explain. These two concepts aren’t as closely linked as you might think. Continue reading

Ep. 058 – Elementary Startup Planning For New Entrepreneurs

SIB-Blog-3What are the fundamental steps for creating a viable business? What groundwork needs to be laid before any entrepreneur can take their business plan to investors? In this episode, host Tom Ryan strips the business-creation process down to the most basic levels to reveal the core elements of a viable startup.

Tom is on the road this week, requiring a slight change of format from two-person discussion to solo show format. As a result, he’ll be taking on a variety of listener questions. Continue reading

Ep. 057 – Do You Really Need a Business Plan?

SIB-Blog-2Are long-form business plans really necessary for every startup? Are they even all that useful? Are there better alternatives? This week, host Tom Ryan takes on this controversial topic, explaining his skeptical view of traditional business plans and offering some other options for fledgling entrepreneurs.

Tom is on the road this week, requiring a slight change of format from two-person discussion to solo show format. As a result, he’ll be taking on a variety of listener questions. Continue reading