Proper Startup Planning
‘Proper Startup planning! Definitely, you mean the business plan.’, said the reader. Well, not exactly. The following lines will present a concept that is contrary to the usual concepts that people learn in business schools. When we learn something new and more realistic, we have to make it clear that we owe credit to the person who taught us this. In our case, he is Steve Blank. The following lines will illustrate a new perspective on business planning.
The traditional concept versus the proper startup planning:
We learned at the Faculty of Commerce, and everyone had a concept that the first thing one should do when starting a business is writing a business plan. The more the business plan fits reality, the more business become successful, which is true.
But, actually, no one writes a business plan that fits reality before dealing with customers. Usually, when the entrepreneur has a business idea, he decides to follow what the book says. Actually, the books said to communicate with customers. Yet, they didn’t show people how to communicate. Consequently, the entrepreneur spends hours in the public library, and more hours at the office for writing the business plan.
Talking about Proper startup planning, for whom do we write a business plan?
For the entrepreneur and the business, no? No, wrong answer. Any entrepreneur builds the business to customers. When one does something for a person, he must consult that person. Otherwise, he will end up doing things the same person doesn’t need. The same thing happens when an entrepreneur does all what the book says, inside his head, in total isolation from the outside world.
What does a proper startup planning, look like?
Anyone who writes a business plan, builds it on assumptions. The big problem is, he starts the execution of the plan before validating these assumptions. Things happen in this way:
While the proper startup planning requires things to be in this way:
Here is what books didn’t say about the proper startup planning:
An entrepreneur should check the validity of his assumptions before rushing to the execution of the business plan. Successful entrepreneurs are taking this step by designing a business model. The business model has nine blocks. They are the basic elements of any business.
Each block represents an assumption that is waiting for validation. The validation process takes place while interacting with customers. Because the customer is the only one who can validate the entrepreneur’s assumptions. When an entrepreneur interacts with the customer through a business model, he goes through a validation process that produce suggested modifications on the same. This process takes time. That’s the reason why Steve blank defines the startup as a temporary organization designed to search for repeatable and scalable business model.
The business model is for a proper startup planning and other things:
The Business model is a very effective tool to use. An entrepreneur uses it for:
- Organizing his thinking. Because it forces the entrepreneur to decide on the basic elements of the business.
- Interacting with customers. The entrepreneur must get out of the building and to turn the hypotheses into facts. While doing the same, the entrepreneur will be updating his business model on a regular basis. This way, the business model becomes a way to keep score for the progress of the startup development.
In conclusion, we are not against planning. We just suggest to do it the proper way. Any entrepreneur is looking for a useful plan that will turn his business into a success. So, he should start by designing a business model instead of starting by writing a business plan.
Muhammad Helmy is a Business coach, Lawyer, Training package designer and Content writer. When coaching, Muhammad Helmy considers not only assisting Entrepreneur in solving the startup problems, but also developing a business model that offers unique value to the community.