Startups without a business plan are just an expensive hobby.

If you sold your last startup for $ 800 million, then you probably already know how to build a new business, and even the most conservative investors will not worry about the quality of your next business plan. But for the rest of us, do not believe the popular myth of Silicon Valley that all you have to do is to jot down your idea for a million dollars on a napkin and investors will line up to give you their money.

Based on my experience as an investor and as a mentor for aspiring entrepreneurs, one of the fastest ways to kill one's authority and startup is to provide a poorly written business plan, or lack of it at all. Indeed, today there are no excuses for the lack of a coherent business plan: a lot of samples on the net, books in any bookstore, as well as dozens of applications that can automate the process of writing BP.

An excellent business plan should not be as thick as a book. Most good BPs are written about 25 pages in size, which is more than enough to briefly describe the whole business: what, when, where, and how. The plan should answer any question from your team, partners and investors regarding your business.

In fact, the process of organizing and documenting the following elements is the best way to make sure that you yourself understand the answers. Would you be comfortable buying a house from a developer, or building it yourself, without any plan whatsoever? I hope not. Most investors tend to consider startups without a plan, nothing more than an expensive hobby.
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There is no magic formula or sequence of actions for formalizing a business plan, but I would recommend the following ten sections, in the same sequence:

• executive summary
• problem and method of solving it
• company description
• market conditions
• business model
• competition analysis
• marketing and sales strategy
• steering group
• financial forecast
• exit strategy

A business plan that skips one or more of these questions is not complete, so you put at risk the only chance to make a first good impression by not offering a complete plan. Spend a little more time to design a competent BP, with a title page, a table of contents, headings and page numbers. Do not try to impress using unnecessary technical terms, jargon and abbreviations.

If you do not have the time or the opportunity to leave much to be desired, use the qualified help. An entrepreneur who cannot plan will probably not be able to manage a new business either.

Of course, if you still do not understand all the components of the BP, it is time to study. I advise you to forget about egoism and find a mentor or partner who has business experience and knows the subject area well so that he can help you plan a viable business. Your idea may be technically correct, but without a business plan, it is dead.

No one gives any guarantees, but various studies show that entrepreneurs who have developed a good business plan, as a rule, double the chances of obtaining financing and building a successful business. In any context, and especially in the world of high-risk startups, where more than half fail, you need to use every advantage you can get.