TO PLAN...OR NOT TO PLAN?!

As I venture toward finalizing the launch of D Leigh Talent, I am confronted with the notion of a formal business plan.  Over the last few months I have toiled over this process, with many starts and stops.  There is a lot to be said for having a clear plan when starting a business, but there are different views about whether this process should be as structured.  I recently read an article on Inc.com regarding whether a business plan is worth the effort.  Two experts in the field were interviewed, David McShea and William Hsu.

David McShea is a partner with Perkins Coie law firm.  He represents technology companies, public companies and venture capital firms.  He provided representation during the IPOs of Amazon.com and Zillow, Inc. He currently represents several venture capital firms.  In 2012, he was honored as Best Lawyers' "Lawyer of the Year - 2012" for Seattle Securities/Capital Markets Law.  

William Hsu is a co-founder and managing partner at MuckerLab.  Previously, he was a Sr. Vice-President at AT&T Interactive with significant achievements in growing that company’s digital presence.  As an entrepreneur, he founded BuildPoint, a bidding management and marketplace services company within the construction industry.   

In the article, these two gentlemen have very different views on whether a business plan is necessary.  For instance, McShea feels that writing things down can help identify gaps and allow you to change course early on if needed. He notes that it’s cheaper to do this during the planning phase, versus starting the business and then realizing the errors in your strategy.  On the other hand, Hsu notes that instead of building a business plan, an entrepreneur should take a more “customer centric” approach.  This is a market demand strategy, where your research is focused on a consumer need. 

In terms of what potential investors may need to understand, McShea’s advice is to do the research and analysis, which will show investors that you are credible and fully capable of executing the plan and spearheading a successful business.  Hsu still believes in a presentation for investors, but one that is more succinct and targeted, with the goal being a quick entry to the market.  He believes that investors today are more like the ones depicted on this YouTube video of the Shark Tank television show, where you have a minimal amount of time to deliver the merits of your idea.   

Both experts note that understanding your customer, knowing the risks and understanding that you may need to be flexible with your plan will be key components to your success.

I recognize merit in both approaches to a business plan.  My decision is to utilize a hybrid approach.  I will do all the research needed for a full blown business plan, but deliver a very succinct presentation of the facts, focusing on the customer need and market opportunity.  In this way, I have a good representation of both qualitative and quantitative methodologies. 

References:

http://www.inc.com/minda-zetlin/should-you-write-a-business-plan-2-experts-debate.html

http://www.perkinscoie.com/dmcshea/

MuckerLab.com http://www.muckerlab.com/about/

OmoeNews. YouTube.com. Shark Tank KISS TIXX lip balm gets two investors KISSING 1 18 2013. YouTube.com.  Retrieved on June 5, 2013 from http://youtu.be/2LrTJZGV0Ng