A few days ago, I met Ben, a first-time founder who's been working on his business idea for 10 months. I asked him to give me the two minute overview of his business idea (or the "elevator pitch" in investor speak). Instead, Ben spent the next ten minutes telling me all about his product, with great passion. So I asked him a few questions about his business model, competitors, unmet customer needs, and marketing plans. But he couldn't answer any of those questions and just talked more about his product . Then I asked him if he had a business plan. He said no, he'd do that when he was getting ready to raise money. I asked how he was deciding what to do in the meantime. He lit up and told me all the things he was going to add to his product next.
Ben finally asked me what I thought of his plans. As nicely as possible, I replied that I thought he was planning his company using the stereotypical male approach to driving: Never stopping for directions or checking to see if he was going in the right direction. I told him he needed to plan like a woman.
Here's what I meant by that.
Make a game plan before you start out. If you're planning a business, you need a business plan, and you should write it down. No, I don't mean you need to write a 40-page Word .doc that no one will ever read. However, you should create a 15-page PowerPoint deck that covers each of the key topics essential for any business, including a clear roadmap for how you're going to build the business out over the first few years. This should be one of the first things you do as you start your business.
Admit what you don't know. No one knows everything needed to start and run a business. The trick is to figure out what you already know, what you don't know, and how you'll fill in the gaps. For example, if you need help building your plan, talk to others who have done it before. It will save you tons of time and help you avoid common missteps. Or, when making your business plan, you may realize that the business requires consumer marketing but that you don't know beans about it. Plan to have a partner who's an expert. Not sure what customers will pay for a product like yours? Talk to those who have sold something similar to the same customers.
Ask for help along the way. Once you have your plan, you should talk to others for feedback. Good people to talk to are investors in similar companies, people who know your industry well, and your customers. You'll likely hear a lot of good things, but make sure you listen to their concerns and ask them what they think would work better. Tell them what you need to get to the next level. That's a great way to find co-founders, investors, partners, and more. They'll give you all the information you need to get where you're going.
Be willing to change your mind. When you get feedback, be willing to change your plan. This is called pivoting. Don't worry, this is normal and every start-up changes plans a number of times. The trick here is to validate the information to make sure you should pivot, and how you should pivot. Do not fall prey to the idea d'jour. And be willing to say "no" (or "not now") to some of the feedback you get. It's important to have the right plan and to be able to make progress against it so you achieve your goals.
Jenn Houser is a serial entrepreneur and start-up advisor. She and David Ronick partnered with Inc. to create Upstart Bootcamp@Inc., a program that guides entrepreneurs to start up smarter through on-demand courses, private coaching, books, articles, videos as well as other tools, resources and services. Jenn has founded five companies and raised more than $40 million from VCs and angel investors. Her last start-up, Motionbox, was acquired by HP's Snapfish in 2010.
David Ronick and Jenn Houser are serial entrepreneurs and start-up advisers. They partnered with Inc. to create Upstart Bootcamp@Inc., a program that guides entrepreneurs to start up smarter. To learn more about business planning, take UpStart's on-demand course. Or get a free reality check to find out if your plan is ready for action.