Ask HN: Business plan... what do you include in it?
7 comments
A document to synch up vision and goals between partners doesn't look very much like the standard business plan (or what's been proposed so far here).
With partners you should have a mutual understanding of:
- Risk tolerance. How much of their own money will they spend? How long will they go without a paycheck? How cheaply can they live?
- Contribution. How much time/money will each partner contribute?
- Equity. Who owns what? I'm a huge proponent of getting equal partners. If they don't deserve an equal share, punt 'em and find someone who does.
- Vesting. How long will it take before everyone owns their share (should be 2-3 years - you don't want someone quitting early and leaving with 33% of your companies stock)
- Goals. Do you want to build a happy little income producing side project? Or a monster business? Or do you want to change the world?
- How to leave, gracefully. There should be a written agreement that has rules for when a partner leaves voluntarily, or when two partners want to push out a third. It's a lot easier to write this down NOW than when your company is worth $10m.
- What you're building, who you're building it for, and how flexible you are on the idea. Ideas change, a lot. You should be passionate about the same things.
- Authority. Does anyone have it on design decisions? Code decisions? fundraising decisions?
- Horizon. How long are you committing to the project before you punt it or pivot to a different idea?
In terms of business plans, it's a great exercise to discuss stuff like development process, roles, sales/marketing, pricing, etc. But don't spend any more time writing the document than you HAVE to to get a shared understanding. 99% of the value is the process-- they usually collect dust once they are written.
With partners you should have a mutual understanding of:
- Risk tolerance. How much of their own money will they spend? How long will they go without a paycheck? How cheaply can they live?
- Contribution. How much time/money will each partner contribute?
- Equity. Who owns what? I'm a huge proponent of getting equal partners. If they don't deserve an equal share, punt 'em and find someone who does.
- Vesting. How long will it take before everyone owns their share (should be 2-3 years - you don't want someone quitting early and leaving with 33% of your companies stock)
- Goals. Do you want to build a happy little income producing side project? Or a monster business? Or do you want to change the world?
- How to leave, gracefully. There should be a written agreement that has rules for when a partner leaves voluntarily, or when two partners want to push out a third. It's a lot easier to write this down NOW than when your company is worth $10m.
- What you're building, who you're building it for, and how flexible you are on the idea. Ideas change, a lot. You should be passionate about the same things.
- Authority. Does anyone have it on design decisions? Code decisions? fundraising decisions?
- Horizon. How long are you committing to the project before you punt it or pivot to a different idea?
In terms of business plans, it's a great exercise to discuss stuff like development process, roles, sales/marketing, pricing, etc. But don't spend any more time writing the document than you HAVE to to get a shared understanding. 99% of the value is the process-- they usually collect dust once they are written.
Thanks, I've always kind of grouped the business plan and this process into one thing. Makes sense to separate these two components.
This is a good set of items to include:
http://www.sequoiacap.com/ideas/
http://www.sequoiacap.com/ideas/
I include 7 things.
1. The idea in a nutshell
----
2. Production - what you'll do to bring the idea to life
3. Marketing - what you'll do to promote the venture
4. Finance - how much money is needed. And what will be the breakeven point and the cashflow positive point.
----
5. Your target audience profile
6. Your competition
7. Your own self - your USP, your resources, your team
1. The idea in a nutshell
----
2. Production - what you'll do to bring the idea to life
3. Marketing - what you'll do to promote the venture
4. Finance - how much money is needed. And what will be the breakeven point and the cashflow positive point.
----
5. Your target audience profile
6. Your competition
7. Your own self - your USP, your resources, your team
Thanks for the response, can you clarify what USP means?
http://en.wikipedia.org/wiki/Unique_selling_proposition
haven't heard that term since advertising 201. what a bullshit class. i spent hundreds of hours creating hundreds of bullshit "thumbnails" for bullshit weight watchers campaigns.
haven't heard that term since advertising 201. what a bullshit class. i spent hundreds of hours creating hundreds of bullshit "thumbnails" for bullshit weight watchers campaigns.
Unique Selling Points?
Paul Graham's business plan for viaweb http://www.paulgraham.com/vwplan.html
7 Common Errors when Writing a Business Plan:
http://entrepreneur.venturebeat.com/2009/07/09/seven-common-...
A business plan is predicting the future. Play around with scenarios of different success/failure points. If you have X amount of cash to work with that will get you y months of time to prove it.
1. Mission/What is It?
2. Current Market (competition)
3. Need left by current market
4. Why this is the solution to current need
5. How it works
6. Pro forma
7. The team
Also, if you feel comfortable, it would be a great help to see some samples of ones you've written in the past.