When launching a business venture, the person in charge of setting up the charters of the organization is called an Incorporator. Among the many duties of an Incorporator, is to file the Articles of Incorporation with the state in which the organization is going to have a substantial footprint. Other duties include, selection of board members to serve on the board of directors, organizing an initial meeting of the board, designate the registered agent/office for the organization, and establish proper licenses with relevant state regulatory agencies.
The most important of all these duties is to establish a business plan. This sounds like a no-brainer, but studies show, very few entrepreneurs come prepared to start a business with an actual plan written out – it’s all in their head. The Wall Street Journal recently wrote a great article on tips for Incorporators who are writing a business plan. The following list is a brief synopsis of that article:
- Don’t focus on the minutia – spending too much time on the details of your business plan, and not actually getting out on the “street” and executing it prevents the entrepreneur from gaining invaluable insight into their product/service viability. Details are important, but a balance should be struck with understanding what it is you are writing about (i.e. is the pricing right? is the target market correct?).
- Allow yourself a framework for learning from your business plan – all business plans are incomplete, wrong, and bad, coming to that reality sooner rather than later will enable a flexible and scalable approach to changing market conditions.
- Don’t use your business plan to raise funds – This portion of the article was very intriguing, but according to Mr. Paul Lee, partner at a venture-capital firm, he states that early stage investors are “less focused on overly detailed business plans” and more interested in seeing if the idea actually works. He states that the best pitches come with a 10 to 12 slide presentation that “succinctly explains the business, with a link to the working service or website and the entrepreneurs biography/past experience.
All participants in the WSJ article agree that a business plan should be written, but make it for the incorporators. Allow the plan to act as a roadmap towards attaining loftier goals within the organization.