I know this has been covered many, many times before, but I believe that business plans in the web industry are highly unnecessary and a waste of effort. Business plans can be effective tools for brick-and-mortar businesses, where year over year planning can be more predictable and may be necessary to secure financing, etc. The web industry is a completely different animal though.
A business plan typically consists of the following pieces:
- Overview of the business
- Industry and market analysis
- Marketing and operational plans
- Financial planning
Sure, most of these pieces apply in some respect to a web business, but not to the same degree as a traditional business. Understanding your industry and the competition in your market is important for any business. For example, you wouldn’t want to open a new butcher shop in an area that already that already has a butcher, 2 major supermarkets, and a specialty foods store. In the web industry it isn’t quite as clear. If your new business offers a different experience or an advantage over the competition then you might have a viable idea. A web business will need a separate group of criteria to be measured against before being built.
Marketing and operational planning is the biggest waste of time in the entire business plan process. There is no way that what you write in your business plan will ever come to fruition. Business, especially web businesses, evolve far too quickly. And no one is ever going to update their business plan frequently enough to keep it relevant. Instead of long-term planning, do continuous short-term planning. You will know more about your business and industry next week than you know this week. Think in terms of days and weeks instead of months and years. A business plan is not the place for this type of planning.
Financial planning is much the same as marketing and operational planning. Anything that you put in your business plan is just a guess that is likely to be wrong. Budgeting should be done on more of a weekly and monthly basis. There are far too many variables to be able to create a realistic budget over 6 months in the future. Having broad financial goals is another matter, and is something that I highly recommend doing (as long as they are realistic and attainable).