If I’ve heard it once I’ve heard it a dozen times: “The business plan is dead. The era of the lean startup is at hand.” Perhaps. As we spend the majority of our time working to develop marketing strategies for startups, we tend to see certain patterns emerge – things that work, things that don’t. As the next cohort of The Harbor Entrepreneur Center takes flight, now is a good time to share our observations:
Despite what you hear, a business plan is good. Honest. If you were building a house, would you just have someone dump a pile of lumber on the lot and start hammering away without a blueprint? Nope. You’d have a plan. The plan would (at a minimum) detail what goes where, who works on what, how much of this or that you need, how much money you will have to spend, how much you plan on eventually making, etc., Does that mean you have to develop one of those tedious 15 page business plan tomes of days past? Well, you can if you want, but there are easier ways to map out your strategy that people may actually read and use. We recommend the Business Model Canvas for our startup friends and clients. It’s a great guide that hits all the things you need and skips all the crap you don’t.
Perfect is the enemy of the good, But sloppy is the enemy of everything. Does a business plan have to be perfect. No. Do your estimates, forecasts, timelines for production, monetization, etc., have to be perfect? No. Do you need to have them and do they need to be realistic? Yes. We have worked with several fledgling companies over the past few months who on the outside appeared to have their act together. When we started digging into their business and asking questions we had to stop and tell them there was work to be done before they go to market. That’s not a bad thing. Really. Don’t kid yourself and rush into the cool startup world just because you can. Take the time to ask hard questions and develop solutions. Sometimes you might have to take a knee until you solve for X. Sometimes you might have to wing it. That’s okay in some cases. In others it’s not. You will know when you’re cheating yourself intellectually. Don’t skip the hard parts of the test just because you don’t like doing the work or the answer it may yield. Risks are okay. Gambles are not.
Don’t rush into the marketing phase until you are good and ready. Marketing communications are developed to support business objectives, not the other way around. (This is why marketing comes third in the list by the way.) If you have not identified your customer segments, value propositions, revenue streams, strategic partners, etc., you have no business marketing your business. Technology has made marketing appear deceptively easy. Tweet some tweets, do a little Mail Chimp and Facebook and you are on your way, right? Hmmm… Developing purposeful, targeted messaging that reflects your brand takes skill. But it’s easier once you have done the necessary homework mentioned above.
You only get one shot at your brand. Make it count. People who misuse the term “brand” bug the crap out of me. Brand is not your logo, your style or your product. You don’t “create” a brand like a piece of art. You don’t “rebrand” by changing your company name and logo if the first iteration of your business fails. If you want to know what your brand is, read this. Go ahead, click the link. I’ll wait… Here’s the punchline: There is no rebranding. You are who you are. Your company is what it is. Your company should have some sort of mission, vision and values statement. They’re not bumper-sticker slogans – they should mean something to everyone involved in your business. They help represent who you are and form a foundational piece of your brand.
Few startups survive. That’s a fact. But if you want to increase your odds of survival, take the time to think through the nine key areas on the business model canvas – or at least develop a blueprint for your business that makes sense to you. Do this before you jump into the fun, sexy marketing stuff. As I told one client recently, “All the SEO and marketing magic in the world can’t propel a half-baked product or business into the realm of success.” But you know what? That person is going back to retool their product and get it to that fully-baked stage. And they’ll have a shot at survival when they do.