When I say don’t write a Business Plan, I know it’s a hard sell. If you say you’re starting a business one of the first things everyone will ask is: “Have you written a business plan?” Everyone wants to see it. The bank wants to see your business plan. So do your friends. And your spouse. And your dog. It’s true that before you hang out your shingle you need to have some idea of how your business is going to stay afloat. But in reality, making your Business Plan your first priority is one of the riskiest things you can do.

Über-consultant Alan Weiss likes to say that the problem with having a Business Plan is that you’ll probably meet your targets.

In other words, whatever your forecast your revenue to be, you’ll aim for that number and you’ll usually hit it. So what’s the problem? The problem is how do you know that you couldn’t have made your forecast more aggressive and hit that, too? His advice is to make a Marketing Plan instead, identifying who your customers will be and how you’ll connect with them.

I say hold off on the Marketing Plan. And don’t write a Business Plan yet, either. First you need a Business Design.

What is a Business Design?

In the broadest of terms, a Business Plan is mainly concerned with How? and a Marketing Plan focuses on Who? Those are good questions and understanding the answers is crucial to the success of your business. However, you can’t answer those two questions without knowing Why? and What? That’s where your Business Design comes in.

The first step in creating your Business Design is asking yourself three questions:

  1. Why are you starting your business?
  2. What do you offer that nobody else does?
  3. Where do you want to take your business in the future?

Let’s take them one at a time:

1. Why are you starting your business?

Can you say it in one sentence? Give it a try. Bonus points if you can make it short enough to tweet. Not that you need to share it—this isn’t your “mission statement”. This is for you. It’s your Core Vision for what you are setting out to create. don’t fill your answer with jargon, buzzwords, or vague clichés. Keep it actionable. “Save the world” is an awesome goal, but what’s the first step?

The true, honest answer to this question is incredibly powerful. Articulating it requires that you look hard at things you have taken for granted about your business and your motivations. You might be surprised at how personal and how human it ends up being.

Once you have your answer, you have something to test your future decisions against. Do they support your Core Vision? If not, are they really what your should be doing?

2. What do you offer that nobody else does?

In a way this is a trick question, because you already answered it with question one. But that was a Vision—this is Action. What are you doing that your colleagues and competitors aren’t? This doesn’t have to be a Big Idea like building all your products out of recycled glue. It could be something small, a tweak to your service, process, or product that makes your offering different and better. The key to this unique differentiator is hidden inside your answer to question 1. What does your Core Vision tell you abut what you are going to present to the world?

3. Where do you want to take your business in the future?

I heard recently that one of the two main differences between startups in Silicon Valley and startups in Colorado is that in the Valley everybody’s startup is going to be valued at $1 billion with the first year, and in Colorado everyone’s startup is going achieve sustainable success so that they can all work 3-day weeks and spend the rest of the time skiing and bagging 14ers.

Those are obviously two very different goals (and part of the reason I live in Denver instead of Sunnyvale), and whatever path you choose will affect everything from how you market your product to how you expand and grow to what products you choose to create.

You probably know what I’m going to say next: if you’ve answered questions 1 and 2, you already have a pretty good idea of what the answer to question 3 is. World domination? World salvation? Or something in between?

Starting with a Business Design will make your Business Plan and your Marketing Plan that much more focused on the original Vision you had for your business. It’s the first exercise we do when I hold Roadmapping Workshops, even with businesses that have been around for years. For them articulating their Core Vision helps them to check what their business is actually doing compared to what their Vision for it is, and how their Vision might have changed since they first got started. 

And for those of you just starting out it will help you know where to sell first, what to create first, who to market to first, and who to hire first. And that’s why I’m saying don’t write a Business Plan—first.

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Photo credit: Chris DiBona via Foter. CC BY-SA

*Until you’ve answered these 3 Questions