Yun-Fang Juan, CEO/Founder of Fundastic
Small Business Entrepreneur: Making Business Plan
A prevailing opinion in the small business community is that business plans are for dinosaurs and nimble startups no longer need them. When I started Fundastic about a year ago, I listened to this advice and jumped into incorporating my company and started building the product. In the process, I also recruited two co-founders who were on payroll. We found ourselves in a mess only 4 months into the venture. Our originally idea of helping business owners obtain low-cost funding through community sourced capital wasn’t really viable. The company was undercapitalized. The legal fees were piling up. One of my co-founders quit. We ended up pivoting. All our actions didn’t lead to actual progress. We last until today due to sheer determination. If we had planned better, so many mistakes could have been avoided; so much money and agony could have been spared.
Business plans are not about the 200-page document with beautiful graphics. It’s about planning. It’s about business planning and life planning of the entrepreneurs.
Business plans are about putting down the following thoughts on paper:
What is the company/business farm doing?
Why do I want to work on a company like this?
Why am I the right person to start a company like this?
Who are my customers and how do I market to them?
How big is the market and my targeted audience? Who are the competitors? What’s my company’s competitive advantage? What’s the end game if things work out?
What are the startup costs? What does it take to bring my product to the market?
How do I obtain the capital before my business generates enough cash flow to fund itself?
How do I support myself before the company can afford to paying me a living wage?
Even the lean startup movement doesn’t free businesses from this planing process because it takes time and money to bring something to the market people are willing to pay for. Before you quit your day job to work on your startup full-time, you should really go through the list and do some planning. At the very least, figure out how long you can afford not having an income to build your company. It’s all about not flying blind.
As for my company, it is in a much better shape now. We went through the planning process and figured out a long term plan. Things are going to change and we understand it’s a tough long journey to become financially sustainable. But my team and I are on board with all the challenges. That’s the beauty of business plans. It’s all about planning and being mindful of the costs, efforts and uncertainties of starting a successful company. It is so necessary that business planning will never be out of fashion.
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