Your SA Entrepreneurship team members, Laura and Tania, field questions every day from BCIT students and alumni like you. In this FAQ series, I am going to focus on a few of your early-stage startup FAQs and share some resources to help you get your business off the ground.
You’ve probably heard your instructors talk about business plans, but are they actually important, and do you need one in order to succeed? Well, it depends! Business plans can certainly be useful, and even necessary, but it depends what your goals are.
If you’re planning to seek funding, whether from investors or lenders, you should expect to present a thorough business plan accompanied by at least three years of financial projections. (Tip: Make sure that the tactics you describe in your business plan are reflected in your financials. For example, if you discuss a marketing campaign that will double sales, don’t forget to show the accompanying marketing expenditure in your cash-flow!) If you need some guidance on how to put together a business plan and financial projections, book a 1-on-1 appointment, and check out Small Business BC’s free downloadable templates.
However, if you’re bootstrapping rather than approaching banks or investors, you might not need to write a business plan. In fact, a common mistake among new founders is to invest time writing a business plan before they’re ready. If you write a business plan before you validate the assumptions behind your business model, your plan will quickly become obsolete. In the early stages, you should focus on designing a strong business model and testing your assumptions. How? The lean canvas methodology (essentially a 1-page business plan) is a simple way to validate or invalidate your assumptions, allowing you to pivot and adapt quickly.
Let’s say you’ve got an idea for an app you want to build and sell. Before investing time and energy in building the app, use the lean canvas to find out if it really solves a problem for your potential customers, and whether or not people will actually pay for it. In other words, first design a strong business model, then start building the product/service and the other elements of the business.
Want to create your own lean canvas for your startup idea? BCIT students and alumni have access to online startup training that walks you through the steps of building a lean canvas for your business.
In short, planning is important, but the type of plan you write (whether a formal business plan or a simple lean canvas) depends on your stage of business development and your goals.
I’ll address more of your top questions in future blog posts. Is there a startup question you want answered?
Connect to book an appointment or ask a question!