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What is your point of view on business plans? Necessary or dinosaurs?

Answered by: Jeremiah Daly

Business plans are a necessary step to build a successful business. While businesses always pivot with new learnings from customers or market events, the business plan serves as a key road map to help the company navigate its way to success. Key elements of business plans include the simply stated mission of the business, the dynamics of the market and identification of competitors, the pain point that the company addresses, the description of the product and why it is better than the competitors, the KPIs and financials, an analysis of the lifetime value of customers and the background of the team. The best format for a business plan is in a presentation format highlighting key themes and metrics. Long word documents are less effective at crystalizing key ideas and themes. Good companies have business plans that change over time, but they always have business plans.

The processes of building and revising a business plan are a helpful exercise for a management team as it builds and adapts its business. The best management teams I see constantly perform tests to refine their sales and distribution model, pricing, retention and refine their business plans and go to market strategies accordingly.

Business plans give management the ability to set goals and measure performance, an early way of practicing the professionalization that is expected of successful companies that scale, especially those that go public.