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Anyone done a formal business plan recently?

I'm having to prepare a "formal" business plan for Songbox just now and I'm finding it really frustrating. Last time I was involved in writing a business plan was in 2013 and then before in that in the mid 2000s sometime.

It seems to me that everyone knows a business plan is a work of total fiction, yet investors, banks, government grant issuing bodies etc demand on seeing one.

What's everyone else's take on this and do Silicon Valley startups (ones that we've heard of) need to endure this bureaucracy or they get by simply on a pitch deck?

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    Hey, I've been looking at Songbox. I have a similar project going on, not a direct competitor, but pretty similar target customers. Just that as a disclaimer!

    Just like you wrote, I also think creating a classic business plan is just a "need to do" thing. Obviously some VCs or Angels want to see it in a typical way because they have analysts working for them. If you have to put it together for a bank or one of those VCs, just do it that way.

    But: I've heard so many stories from investors that ruin it. All the hassle, all the reporting in a "formal way" just because everybody has to do it.
    If I were thinking about letting people invest in my business, I would want him/her to like & support (to some degree) the way I operate. They should agree with the way I think reporting is best for this company. Of course, I'm open to improvement. But I wouldn't want someone who thinks it's good to waste time on things that are done just to be correct, not to get the best impact or value.

    So I would create a business plan that I think best reflects the company. That way you can eliminate investors who wouldn't be a good fit for you anyway. And you save yourself a lot of trouble down the road. At least that's my guess. I haven't taken any VC money and don't plan to. Only if the personal level makes sense and we have a similar strategic vision.

    My business plan would look more like something I like to do to evaluate my own projects. It's more or less along those lines:

    • Understanding the business: elevator pitch + the why.
    • Facts: the situation the business in. No BS. Don‘t BS others and more importantly: don‘t BS yourself. Hard facts only.
    • Future facts: what will happen, how we will grow. Sell the vision to me and others.
    • Action plan: what needs to be done, costs, important calculations, what people do you need, what path do you need to take. Dream a little, sell reality.
    • Justification of the protections: take current numbers (revenue, growth rate etc) and argue "mathematically" why the methods mentioned in the action plan are likely to lead to the "future facts".
    • Alternatives: What else can the customer choose?
    • Priorities: let everyone know what you will focus on and why.

    Of course, this is not a suggestion. Especially if you are „just“ trying to get the big bucks.

    I personally would prefer to take on strategic partners who share the vision and support the realization of that vision and get less monetary investment.
    So I weed out the people who will bring those kinds of problems.
    People who don't like my approach wouldn't like how I think about my business. So, no thank you. It wouldn‘t help anyone.

    Especially: at some point I would probably struggle with feelings of guilt. Receiving lots of money but sticking to my plan, regardless what the investors want.
    In theory I‘d say it‘s easy to stick to my way. But in reality it would probably be harder to actually do and will cost a lot of time and energy.

    Edit: fixed typo, added a few words.

    1. 1

      This is great. Thanks for taking the time to write so much.

  2. 0

    Thanks for sharing this detailed analysis of all programs. I want to test it for sewinglogs program.

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