Note: This article considers small size web startups that start with 2-3 people team. It does not cover high value startup projects (as in such cases a business plan has to be written by default); although in some cases it may be applicable to them too.
In these days of Web startups, where cost of launching an online venture has reduced drastically, writing a Business plan has become kind of passÃ© or old fashioned. I see numerous small startups come to fore purely based on a single idea that can be executed at low cost.
In such cases is it important to write a Business Plan?
Yes, it very much is! A business plan is preparedÂ not only for getting venture capital or funding. It has lot more to it. It is for the entrepreneur himself and his team more than for any one else.
Advantages of writing a business plan for the startup team are:
It will force you to think at granular level from start to end.
However well you may have planned the project in your mind, the process of writing it in black and white triggers new thoughts and forces you to analyze lot more than you would normally do.
It will let you come up with concrete vision and realistic end goals
With all the new thoughts and analysis that trigger with writing a business plan, more often than not, the vision and end goals will change that will have solid foundation and reasoning of their own. The chances of success improve drastically as the project is now based on deeper analysis and more realistic end goals.
it will provide you with clarity of timelines.
We are living in an age where time is of most essence, especially if you are planning an online venture. How many times has it happened that due to delay in launching a project, someone else has launched a very similar venture? Although, this can happen anytime, writing a business plan will give you clearer idea about effort, resources and timelines required thereby reducing the risk to a large extent.
It will give you better idea about feasibility of project
Writing the business plan is a grueling process that forces you to think clearly about how all aspects of your business will come together. Some of the assumptions that you have at the start may not hold true by the time you finish writing the business plan. This provides better insights on potential pitfalls and thereby the project feasibility.
A Business plan makes you feel more confident
This according to me is very important. When decisions are taken based on concrete analysis and reasoning, it makes you feel completely confident of what you are doing and Â it plays a major role in the success of your venture.
Although, the business plan needs to be updated based on changing circumstances, preparing it before starting your project has many advantages that are important for the success of your project.
I would love to hear your thoughtsÂ on this.Â