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Do start-ups need a business plan?

Is a business plan really necessary?Do start-ups need a business plan?

It's one of the first questions we're asked and my response is that it is helpful but not 100% essential at the seed stage. Let me go on record to say I think it's important to have a plan. A plan doesn't mean an enormous written document, but it does mean having key points;

  • a set of goals
  • a set of milestones
  • a direction that you can point the entire team at

Plans always change

Having these goals and milestones set down allows you to stand back and take a look to see what you planned versus what you achieved, it's a reality check. What is certain is that probably 90% of business plans will end up shifting. As the saying goes, "nothing goes to plan" but having one to direct the efforts of the team is a definate plus. 

So what about start-ups and business plans?

Sometimes it's difficult to formulate a business plan at the start up and early stage lifecycle. However, you'll need something to communicate to potential business angels and investors. Our advice is to work through the following process to work towards the development of the plan.

Steps to develop your business plan...

Use the following methodologies;

Once you have worked through the above process, develop your 1st cut on the financials. Analyse your key drivers in the business, what drives the numbers? and develop the germination of the business plan from these methods and financial outputs. From this, develop your "two page flyer" and investor presentation, slide deck and a set of high level financials. All of this collateral should be developed before commiting to lenghty word based business plan. Finally, know your high level numbers off by heart!

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Growth Capital Ventures (GCV) is backed by funds managed by Maven Capital Partners, one of the UK’s leading private equity and alternative asset managers.