This series takes concepts learned in an MBA program and adapts them for easy comprehension by scientists without a management background. Presented here is the last part in an introduction to drafting a business plan.
For close to a year now, we've been looking at what makes a winning business plan. Every month, we've addressed a separate section of the plan--what information should be contained within that section, as well as what makes the section a winner. This month, we're going to go back to where we started--with a "big picture" view of your business plan.
When you've finished writing a business plan, an essential step is to print the business plan and forget about it entirely for a while. Depending on how pressing your business idea is, even waiting a couple of weeks or a month before looking at it again will help. There are two reasons for this. First, like any long piece of writing, it is very difficult to objectively criticize your business plan if you wrote it in the same sitting. After all, you remember what you meant after reading your own words. Two weeks later, though, it's almost as if you were a third party reading the plan for the first time: You will very likely forget about what it was you meant when you originally wrote the plan, and you can look at it with a fresh eye.
The second reason you should wait a couple of weeks before doing the final edit of your plan is what I call the "2-week test." During the 2 weeks you've set the plan aside, you've been working on your business. Even if you haven't, your subconscious mind has been tossing and turning, coming up with new ideas and rejecting old ones. These may be improvements to your plan that you will want to add to it. But in a good plan, the fundamentals won't change in those 2 weeks. Although a plan is supposed to be a "living document" that evolves as your business develops, your plans and ideas should stand firm over short time frames. There is a good reason for this: If you send your plan to some venture capitalists, it might be a month before they read it. And if your plan at that point is substantially different, you're going to have some explaining to do.
So, given that you've waited 2 weeks, and you're reading your plan again with a fresh eye, what should you look for?
The First Glance
The first thing you should do is read it very quickly. Pretend your are a venture capitalist and take 15 minutes to skim the plan. Can you get a gist of what the plan is about? Are the sections well organized? Is the plan visually pleasing? After this quick read-through, you should be able to quickly flip to the summary section and the money (both what you need and what you will make) section. If you can't find these two sections quickly, you should rework the plan to emphasize these sections.
The Check for Consistency
The next step, of course, is to read the plan through carefully. Here, you should be looking for consistency. A lot of the time, over the course of drafting your plan, your business will evolve. Take a close look at the financials and determine whether they still reflect your marketing plan. Look at the sections you wrote first and see if they mesh with the ones you wrote last. Does your overall strategy still make sense? The most common problem is that the different sections of the plan describe the business at different stages, and the growth of the business over time at different speeds. For example, your scientific plan could have you moving from animal studies to Phase I clinical trials in year two, while your financial plan is spending clinical trial money in year three and your marketing plan has you finding pharmaceutical marketing partners for your Phase I product in year one. Over the drafting of the plan, your milestones may have changed, so go back and make sure they're consistent.
Although each section of the business plan needs to say specific things, the drafting of a good plan can resemble art. In the end, like art, you've got to take a good look at it, then take a step back and ask, "What's the story here?" Aim for a clear and concise story that remains consistent through the work.
The Big Picture
The last thing you should do before finishing up your plan is to think about whether you're willing to sacrifice everything you find comfortable, simply for the chance of starting this business. In many cases, about the most stressful thing that can happen to a scientist-turned-entrepreneur is that someone else likes their plan. Or worse--someone gives you a whole whack of money to start your business. Guess what? Your life is changed. It's one thing to write up a business plan from the comfort of an academic setting, an entirely different thing to implement it. Before sending the plan to anyone, ask yourself if you are really willing to risk your career, standard of living, family, and friends, to start up this business? Because that's the risk you're taking.