Growthink Co-founder David Lavinsky was interviewed
on BusinessWeekTV recently regarding his core understandings of
strategic business plan development gleaned from nine years of working
with hundreds of entrepreneurs.
Entitled "What the Business Plan Expert Knows," key takeaways from the interview include:
- Changes in the Nature and Expectations for Business Plans over the Years.
Because of the nature of technology and the "flat world," investors
today are less interested in first mover advantage as a key value
driver and more interested in the track record/experiences of
management and the initial execution/market traction of the business.
- The Importance of Writing the Business Plan Right Away.
The biggest cost in any business is the opportunity cost - or the cost
of pursuing the wrong opportunity. The best way to minimize this cost
is to undertake a formal business plan development process at the start
of any new business or any new growth initiative for an existing
business. This is especially true for the market research and
feasibility study components of a business plan: the analysis of the
industry, competitors, and customers that is the core of sizing and
scoping the prospective market opportunity.
- The Difference Between an Investor-Focused Business Plan and an Operational Plan.
An investor-focused business plan is, at heart, a marketing document.
It must contain all of the elements of an operationally-focused
business plan, but needs be developed and presented in such a way as to
have a clear call to action to invest. It must have a compelling,
flowing narrative. An operations-focused plan, which Dave believes
should be created on an annual basis (and reviewed consistently),
should primarily be focused on key milestones - such as number of
visitors to the Website, headcount, customer attrition rates, etc.
- The Rise of the Niche Investor.
More than ever, investors have grouped themselves into various niches -
software as a service (SaaS), healthcare, renewable energy,
franchising, etc. It is important to draft the business plan in
congruence with these niche orientations.
The full interview can be seen on BusinessWeekTV here.