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Don't Waste Time On A Startup Business Plan -- Do These 5 Things Instead

Traditionally, startup businesses draft a business plan for three specific reasons: to articulate their vision for the business, to document how they plan to solve key challenges, and to pitch their business idea to potential investors.

My many years of experience working with startups, entrepreneurs, and venture capitalists has led me to conclude that business plans are largely a waste of time for the following reasons:

They are time consuming. Thorough business plans take a long time to prepare, even if you use business planning software.

They get outdated quickly. Your business plan quickly becomes obsolete as you encounter operational and marketing issues.

Nobody has time to read them. Prospective investors and venture capitalists don’t usually have the time or interest to slog through such a document. They review hundreds if not thousands of startup opportunities, so you have to grab their attention with something much shorter.

So instead of wasting your valuable time preparing a business plan, I suggest that you do these five things instead when launching your startup:

Business plans for startup companies are usually not worth the effort. Learn what you should be focusing on instead.

1. Prepare a Great Investor Pitch Deck for Prospective Investors

Developing an engaging “pitch deck” to present your company to prospective investors instead of a business plan is the new norm. The pitch deck typically consists of 15-20 PowerPoint slides and is intended to showcase the company’s products, technology, and team to the investors.

Raising capital from investors is difficult and time consuming. Therefore, it’s crucial that a startup seeking funding absolutely nails its investor pitch deck and articulates a compelling and interesting story in the short time it has during the presentation.

You want your investor pitch deck to cover the following topics, roughly in the order set forth here and with titles along the lines of the following:

Company Overview (give a summary overview of the company)

Mission/Vision of the Company (what is the mission and vision?)

The Team (who are key team players? what is their relevant background?)

The Problem (what big problem are you trying to solve?)

The Solution (what is your proposed solution? why is it better than other solutions or products?)

The Market Opportunity (how big is the addressable market?)

The Product (give specifics on the product)

The Customers (who are the target customers? why will there be a big demand from these customers?)

The Technology (what is the underlying technology? how is it differentiated?)

The Competition (who are the key competitors?)

Traction (early customers, early adopters, partnerships)

Business Model (what is the business model?)

The Marketing Plan (how do you plan to market? what do you anticipate for customer acquisition costs vs. the lifetime value of the customer?)