Everyone hates business plans: Unlike toilet paper, 1 sheet is enough (unless... you roll that way?)
Note: This article was originally published on the pitchblak blog and has been edited for Digest.
Business plans are traditionally 20-40 page documents that are supposed to define the plans & objectives of new ventures, but they have some problems: putting peppy peeps to sleep and being almost never read in full by anyone.
Why? They're chock-full of hopeful financial projections and a ton of filler. Simply put, they are a bore.
And it's not just an eyesore for the reader, but a throbbing headache for the writers as well. Business plans of traditional length take months to write just for an investor to take a 5-minute skim before uttering the dreaded two letter word, 'no'.
It has become clear that the whole business plan thing isn't fun for either side of the table.
Founders don't want to spend their a bulk precious time sequestered away writing a business plan instead of building their business, and investors hate reading assumptions pulled out of thin air & idealistic financial projections that make even WeWork's initial valuation sound realistic.
However, the solution to the pent-up frustration isn't to completely scrap the whole thing.
It is to optimise it — how, you ask? By crafting a 1-page business plan, based on Ash Maurya's Lean Canvas, which is inspired by Alex Osterwalder's Business Model Canvas. The 1-pager is optimised for startups that test & iterate quickly, as opposed to planning for ages and implementing... never?
You may be wondering, 'Why do I still need a written plan? Can't I scrap the whole thing?'.
Having a written plan is efficient because it takes a vague idea (or possibly even quite well thought out) and forces it to definitely make sense on paper. It ensures that you clearly deconstruct your idea into a set of key assumptions and it necessitates a process where you can challenge the different facets of your idea, allowing them to emerge from the other side more robust.
It also makes validating ideas easier when testing because you now have a list of thoughtful assumptions you can reference.
Fast, concise & effective. Those three words should be front and centre when crafting your 1-pager.
It needs to be concise enough to be read and understood quickly, while maintaining the essence of its utility.
So then, just how do you go about writing this 1-pager? Easy — answer a bunch of straightforward questions:
Using Netflix as a hypothetical example (and assuming it is 2007), the problem is how inconvenient it is to rent a movie because you have to go to the store.
The best alternative is to watch movies on cable.
Customers are likely to be anyone who is willing to pay a subscription fee for the convenience of watching a variety of movies and TV shows of their choice without leaving the house.
Early users might be tech-savvy individuals (mostly 20-40 years old?) willing to pay a subscription fee for an on-demand internet streaming service with a limited selection.
A relatively cheap and convenient on-demand, online streaming service with a fast-growing catalogue of movies and TV shows.
Users won't have to leave the house to go to Blockbuster to rent movies (inconvenient) or wait for DVDs to arrive in the mail. Instead, they can watch a selection of movies on-demand without moving from the couch (convenient).
The HLC could be 'YouTube for movies and TV shows'.
Note: A HLC is a 'X for/of Y' concept which explains the essence of your idea in a simple one-liner eg DoorDash is the Uber of food delivery
Compared to cable TV providers, Netflix can more easily and quickly onboard customers and build its customer base, has first-mover advantage and a rapidly increasing selection of on-demand content.
By getting users to pay a monthly subscription fee to use the service, or an annual fee at a discounted rate.
Paying salaries, movies & TV show licensing fees, server hosting fees, etc.
An increasing growth rate of paying users and increasing month-over-month (MoM) monthly recurring revenue (ie the total monthly amount customers will be paying for the service).
Through word-of-mouth, social media content marketing, paid ads, etc.
And that's it — you know have your very own 1-pager.
Now that you've written your business plan, back to Netflix right?
Well you can, but the 1-pager is just the first step in a marathon — you'll find that as you begin to test the assumptions laid out on your 1-pager through idea validation techniques and eventual customer discovery, your page will evolve quickly with every iteration.
View your 1-pager as a starting point you reference and edit from time to time, not a plan that is set in stone.
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