Guide To Writing Your Business Plan

Most business plans are written too early; before entrepreneurs have an idea where their start-up is headed.

lanning is important. But results are what count. And who delivers the results? Entrepreneurs. Entrepreneurs like you can change the world.

Why, then, is there so much fascination with business plans (and pitches and canvasses and all the rest) in today’s entrepreneurship community? Why do investors ask to see them? Why are there software packages to automate the business planning process? Why do so many accelerators focus on pitching again and again?

The Problem and a Solution

Unfortunately, it is clear that the vast majority of business plans raise no money. Of those ventures that are financed, many if not most will fail.

The simple fact is that most business plans should never have been written, and most with any merit are written far too soon, before there’s any real evidence to support their assertions. So, why are so much blood, sweat and tears invested in labouring over the perfect business plan? Good question.

“Is there a solution?” you might ask. Indeed, there is. Instead of diving into business planning mode, step back and ask yourself whether the opportunity you have in mind is genuinely attractive.


That’s what an aspiring entrepreneur named Cassian Drew did before embarking on a plan to sell climbing wall hardware and exercise programmes to fitness facilities. He spent a summer examining his opportunity and, in the process, learned exactly how fitness operators assess the economics of the gear they acquire.

business plan

Your main consideration is: will it sell?

Alas, it quickly became clear that the economics underlying what he had thought to be a great idea just weren’t going to fly. While he and his partner were well suited to the opportunity and the market was attractive – with booming interest in both fitness and climbing in the UK – there simply wasn’t a business model that would work.

As Cassian Drew and countless numbers of entrepreneurs have learned, usually the hard way, opportunities are best understood in terms of three crucial elements: markets, industries, and the one or more key people that make up the entrepreneurial team.

The seven domains model articulated in The New Business Road Test: What Entrepreneurs and Investors Should Do Before Launching a Lean Start-Up brings these elements together to offer a clearer way to answer the crucial question that every aspiring entrepreneur must ask him or herself every single morning: “Why will or won’t my idea work?”

The model offers a better toolkit for assessing and shaping market opportunities and a better way for entrepreneurs or entrepreneurial teams to assess the adequacy of what they themselves bring to the table as individuals and as a group.

The model also provides the basis for what I call a customer-driven feasibility study that entrepreneurs, whether in nascent start-ups or deep in the bowels of an established company, might use to guide their assessments – before they invest precious time and effort in writing a business plan (see the Exhibit).

The Feasibility Study and the Business Plan: How Are They Different?

How do the seven domains model and the customer-driven feasibility study it delivers differ from what’s in a good business plan? To be sure, there is considerable overlap in the content of a customer-driven feasibility study and a business plan. And that’s actually a good thing.

In fact, all of the analyses we advocate are essential, though not sufficient, for crafting a thoughtful, evidence-based business plan or preparing a pitch. So, what’s new here? What’s different?

Customer focus: The feasibility study is focused on the customer. As Peter Drucker wrote many years ago, the purpose of any business is to win a customer.

The feasibility study hones in on that purpose, one quite different than that of most business plans and pitches – to win an investor. Without the likelihood of there being customers, there will likely be no investors.


Economic fundamentals: The feasibility study succinctly addresses the fundamental economics of the business, by identifying the key drivers of cash flow: revenue, customer acquisition and retention costs and timelines, gross margins, required capital investment, and the working capital characteristics of the operating cash cycle.

If these drivers are satisfactory, detailed strategies – for marketing, operations, and financing – can probably be developed to make the venture economically viable, provided the market, industry, and team elements are sufficiently attractive. If they are not, there’s little point in wasting time developing such strategies.

Wall Street

As they say in the US, if don’t make dollars then it don’t make sense

Mindset: The customer-driven feasibility study asks the critical questions necessary to satisfy the entrepreneurial team’s curiosity about the attractiveness of the opportunity itself, and makes it possible to answer these questions before developing the detailed strategy necessary for the completion of a business plan.

Thus its mindset is to ask (and answer) questions, not to sell the venture’s merit. In contrast, the business plan organizes the answers delivered by the feasibility study and goes on to develop marketing, operating, and financing strategies in an effort to sell the opportunity, in a sharply focused way, to investors and other stakeholders.

Why Bother?

“Are these differences worth the effort?” you might ask. Why shouldn’t you, as a would-be entrepreneur, simply skip the feasibility study and proceed directly to preparing a business plan?

First, researching and preparing a customer-driven feasibility study gives you a chance to opt out early in the process, before investing your precious time and energy in preparing a plan. Thus, it can save weeks or months of time that might be wasted on a fundamentally flawed opportunity.

Second, for opportunities that do look promising, the feasibility study jump-starts the business planning process and provides a clear, customer-focused vision about why your proposed venture makes sense – from market, industry, and team perspectives, viewed independently and collectively.

It identifies the customer pain, how you’ll resolve it, and the one or two domains that make the opportunity stand out. These factors become the drivers of your business plan.

Third, by ensuring that all aspects of the opportunity are examined, your analysis reduces your risk of entering a fatally flawed venture.

No car-buyer would buy a new car without a road test, and that’s a far less risky decision than the one you are about to make. A customer-driven feasibility study is the entrepreneur’s new business road test. Entrepreneurs who proceed without one ignore it at their peril!



The Customer-Driven Feasibility Study

1.    Executive summary that summarizes what follows (tell the reader(s) – you and your team – what you are going to tell them)

2.    Micro-level market assessment

·         Target market’s pain identified; compelling benefits of your solution identified, with evidence that those in this segment are willing to pay

·         Target market segment, size, and growth rate

·         Options to grow into other segments

3.    Macro-level market assessment

·         Overall market size and growth rate

·         Macro trends analysis to assess future market growth and attractiveness

4.    Macro-level industry assessment

·         Five forces analysis: Is the industry attractive?

·         Likely changes therein going forward

5.    Micro-level industry assessment

·         Proprietary elements?

·         Superior organizational processes, capabilities, or resources identified, that are not easily duplicated or imitated?

·         Economic viability of business model established

o   Revenue forecast

o   Customer acquisition and retention costs, and time required to obtain a customer

o   Gross margins

o   Capital investment required

o   Operating cash cycle characteristics

6.    Team assessment

·         Team’s mission, aspirations, and propensity for risk

·         Team’s ability to execute on the critical success factors in this industry

·         Team’s connectedness up, down, and across the value chain

7.    Summary and conclusions (tell the reader(s) the key highlights of what you’ve told them)

·         Why is – or isn’t – this opportunity attractive? On what one (or at most, two) domains do you rest your case?

This piece is excerpted from John Mullins, “The New Business Road Test: What Entrepreneurs and Investors Should Do Before Launching a Lean Start-up,” London: FT/Prentice Hall, fifth edition 20107.


Related Articles


  1. Howdy very cool web site!! Man .. Beautiful .. Wonderful
    .. I’ll bookmark youhr web site and take the feeds also…I’m
    glad to search out a lot of helpful information here
    within the post, we want work out more strategies inn this regard, thanks for sharing.

  2. I’ve beeen browsing online more than 3 hours today, yet
    I never found any intrresting article like yours. It’s pretty
    worth enough for me. In my view, if all website owners and
    bloggers made good content as you did, the net wiill be a lot more useful
    than everr before.|
    I could not refrain frtom commenting. Very well written!|
    I will immediately grab your rss as I can’t to find your email subscription link
    or e-newsletter service. Do you have any? Please alliw mme recotnise iin order that
    I may subscribe. Thanks.|
    It is the bestt time to make some plans for the future and it’s time to be happy.
    I have read this ppost and if I could I wiseh
    to sugygest you some interesting things or advice. Maybe you can write next articles
    referring to thgis article. I want to read more things about it!|
    It iis the best time to make a few plans for the long run and it is time
    to be happy. I’ve learrn this publish and if I could I want too suggest you some interesting things orr advice.
    Perhaps yyou could write next articles referring to this article.
    I desire to read more issues about it!|
    I’ve been surfing on-line more than 3 hours nowadays, yet I by
    nno means found any interesting article like yours. It’s pretty
    worth sufficient for me. In myy opinion, if all web owners and bloggers made excellent content as you did,
    the internet will likely be much more useful than evver before.|
    Ahaa, its nice discussion concerning this piece of writing
    hdre at this web site, I have read all that, so now me
    also commenting here.|
    Iam sure this paragraph has touched alll the internet visitors, its really really pleaant post on building up neew blog.|
    Wow, this article is good, my sister is analyzing such things, therefore I
    am going too tel her.|
    Saved as a favorite, I like your blog!|
    Way cool! Some extremely valid points! I appreciate you
    writing this postt plus the rest of the site iss also really good.|
    Hi, I do think this is an excellent website. I stumbledupon it 😉 I may come back yet again since i hazve saved as a favorite it.
    Money and freedom is the best wway to change, may you be rich annd continue
    to help others.|
    Woah! I’m really enjoying the template/theme of this site.
    It’s simple, yet effective. A lot of times it’s challenging
    to get that “perfect balance” between superb usability and visual
    appeal. I must say you have done a superb job with
    this. Additionally, the blog loads extremely fzst for me on Internet explorer.

    Outstanding Blog!|
    These are genuinely great ideas iin about blogging.
    You have touched some fastidious things here.

    Any wway keep up wrinting.|
    I love what yyou guys are up too. Such clever work and
    exposure! Keep up the great works guys I’ve included you guys to my own blogroll.|
    Hey there! Someone in my Myspace group shared this website with us so I came to twke a look.

    I’m definitely loving the information. I’m book-marking and will be tweeting this to my followers!
    Terrific blog andd wonderful design and style.|
    I love what you guyss tend too bee up too. This type of clever ork and coverage!

    Keep up the very good works guys I’ve included youu guys to my blogroll.|
    Hi would you mind stating which blog platform you’re using?
    I’m planning too start my own bkog in thhe near future but I’m
    having a difficult time deciding between BlogEngine/Wordpress/B2evolution and Drupal.

    The reason I ask is because your layout srems different then mosat blogs and I’mlooking for
    something unique. P.S Sorry for geting
    off-topic but I had to ask!|
    Hi would you minbd letting mee know which hosting company
    you’re using? I’ve loaded your blogg in 3 different internet browsers and I must say this blg loads a lot fastdr then most.
    Can you suggest a good internet hosting provider at a fair price?
    Many thanks, I appreciate it!|
    I really like itt when individuals come together aand share ideas.
    Great blog, keep it up!|
    Thank you for the auspicious writeup. It in fact was a amusement account it.
    Look advanced to more added agreeable from you! However, how could we communicate?|
    Hi there just wanted to give you a quick heads up. Thee words in your content seem to bee running off the screen in Opera.
    I’m not sure if thiks is a formatting isue or something to do with internet
    rowser compatibility but I thought I’d pot to let you
    know. The design and style look great though! Hoppe youu
    get the issue fixed soon. Thanks|
    This is a topic which is close to my heart… Thank you!
    Where are your contact details though?|
    It’s very trouble-free to find out any topic
    onn webb as comparesd to books, as I found this piece of
    writing aat this weeb site.|
    Does your blog have a contact page? I’m having a tough time locating it but,
    I’d like to sed youu an e-mail. I’ve got some creative ideas for your blog you might be interested in hearing.
    Either way, great site and I look forward to seeing it develop ovger time.|
    Hey there! I’ve been reading your site for a long time now and
    finally got the courage to go ahea and give you a shout out from
    Austin Texas! Just wanted to tell you keep up the good work!|
    Greetings frfom Florida! I’m bored at work so I decided to
    check out your site on my iphone during lunch break.
    I really like the imfo you present here and can’t wait
    to take a look when I get home. I’m shocked at hhow fast your blog
    loaded on my phoe .. I’m not even using WIFI, just 3G ..
    Anyhow, good site!|
    Itss like you learrn my thoughts! You appear to know a
    lot about this, lik you wrote the e-book in it or something.
    I believe that you just could do with a few percent to drive the message
    home a bit,but other than that, this iis magnificent blog.
    A fantastic read. I wiill certainly be back.|
    I visited multiple web pages but the audio quality for audio sonhs existing at this web page is
    truly superb.|
    Hi, i read your blog from time too time and i own a similar one and i was just curious if you get a
    lot of spam remarks? If so how do you protect against it, any plugin or anything you can recommend?
    I get soo muc lately it’s driving me mad
    so any assistance is very much appreciated.|
    Greetings! Very helpful advice inn this particular article!
    It’s tthe little changes that produce the largest changes.
    Thanks for sharing!|
    I trully love yoyr website.. Great colors & theme. Did you degelop this website yourself?
    Please reply back as I’m looking tto create my own personal site and
    would love tto find out where you got this from or just what the theme is
    called. Kudos!|
    Hello there! This blog post couldn’t be written any better!
    Lookijng through this article reminds me oof my previous roommate!
    He constantly kwpt preaching about this. I am goinng to send this post to him.

    Pretty sure he’ll have a good read. Thank you for sharing!|
    Wow! This blog looks just like my old one!It’s oon a entirely different topic but it has pretty
    much the same page layout and design. Great choice of colors!|
    There iis certaiunly a great deeal to find
    out about this issue. I really like all the points you
    hav made.|
    You’ve made some really good points there.
    I looked on the web for additional information about thee issuje
    and found most people will go along with your views on this
    Hi there, I read yourr new stuff on a regular basis.
    Yoour story-telling styule iis witty, keep up the good work!|
    I simply couldn’t depart your web site prior to suggesting that I actually enjoyed
    the usxual info a person provide on your visitors? Is gonna be again ceaselessly in order to inspect new posts|
    I needded to thank you forr this good read!! I absolutely loved
    every bit of it. I’ve got you book marked to look at new things youu post…|
    Hi there, just wanted to tell you, I enjoyed tis article. It
    was inspiring. Keep on posting!|
    Hi there, I enjoy reading through your article. I like to
    write a little comment to support you.|
    I every time spent my half an hour to read this blog’s content everyday alonbg with a cup of
    I constantly emailed this website post page to all my associates,
    sincce if like to read it then my friends will too.|
    My coder is trying to convince me to move to .net from PHP.
    I have always disliked the idea because of the expenses.

    Buut he’s tryiing none the less. I’ve been using Movable-type on a number of websites for about a year and
    am worried about switching to another platform. I have
    heard fantastic things about
    Is there a way I can transfer all my wordpress contentt into it?
    Anny help would be greatly appreciated!|
    Howdy! I could have sworn I’ve been to thus blog beforre but after going through some of the posts I realized it’s new to me.Nonetheless, I’m definitely pleased I came acrss it and I’ll be
    bookmarking it and chscking bahk frequently!|
    Great article! This is the kind of information that are meant tto be
    shared around the net. Disgrace on thee search engines for
    noo longer positioning thuis submit upper! Coome on over and visit my sote .
    Thank you =)|
    Heya i’m for the first timje here. I came across this
    board and I find It truly useful & it helped me out a lot.
    I hkpe to give something back annd aid others like you helped me.|
    Greetings, I do believe your blog coujld be hving web
    browser compatibility problems. Whenevfer I look at your website in Safari, it
    looks fine however when opdning in I.E., it’s got some overlapping issues.
    I just wanted to give you a quick heads up! Aside from that,
    fantastic blog!|
    Someone necessarily assist tto make seriously articles I’d
    state. That is the very first time I frequented your website page and thus far?
    I surprised with the research you made to make this particular put up amazing.

    Magnificent task!|
    Heya i am for the primary time here. I found this board and I in finding It
    really helpul & it helped me out much. I am hoping tto offer
    something back and help others sych as you aided me.|
    Good day! I jusxt want to give you a big thumbs up for tthe excellent information you’ve got here on this post.
    I will be returning to your web site foor moire soon.|
    I every time used to study post in news papers but now as I am a user of net therefore from noow I am using net for content, thanks to web.|
    Yourr means of telling everything in this poost is genuinely pleasant, every one be able to without difficulty understand it, Thanks a lot.|
    Hello there, I found your web site viaa Google at
    the same time as searching for a relted matter, your website came up, it sedms to
    be good. I have bookmarked it in my google bookmarks.

    Hello there, simply changed into aware of your
    blog via Google, and found that it iss really informative.
    I am gonna watch out for brussels. I will appreciate should you continue this in future.

    Numerous people caan be benefited out of your writing.
    I am curious to find out what blog system you happen to be utilizing?
    I’m having some minor security issues with mmy latest site and I would like to find something more safe.
    Do you havbe any suggestions?|
    I am really iimpressed with your writing skills and
    also with the layout on your weblog. Is tis a paid theme or did you customize it yourself?

    Either way keep up the niuce quality writing, it’s rare to see a great
    blog like this one these days.|
    I am realy imprdessed together with your writing talents as well ass with the structure to your blog.

    Is tha this a paid subject or did you modify it yourself?
    Anyway stay up the excellent quality writing, it’s rare tto
    look a grfeat weblog like this one nowadays..|
    Hi, Neat post. There is a prolem together with your website in webb explorer, could check
    this? IE nonethelrss is the market chief andd a large part of folks will miss your great writing due to this problem.|
    I’m nott sure where you’re getting your info,
    but good topic. I needs to spend some time learning more or understanding more.
    Thanks for great information I was looking foor thbis info for my mission.|
    Hello, i think that i saw you visited my web sie thus i came to “return the favor”.I’m attempting tto find things to enhance my web site!I
    suppose its ok tto use a few of your \

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.