Cameron Chell: Success is built on a firm plan

Despite successful startups seemingly sprouting up overnight, behind the scenes there are often months, if not years, of planning leading to this kind of success.

Famed American inventor Benjamin Franklin once said, “By failing to prepare, you are preparing to fail.” He was completely right. Failing to plan doesn’t necessarily ensure failure. However, it does assure that when a crisis does arise, a startup may be ill-prepared to handle it due to lack of planning.

Creating a well thought-out and in-depth business plan with expense projections, revenue forecasts, and more can help a small business remain committed to its long-term goals. A formal business plan can also be used to judge whether a business is indeed ready for its next step on its road to maturity.

“The biggest reason to write out a business plan regardless of any financing option concerns is that it can help you stay organized and remain on track,” said Andrew Schrage of Money Crashers Personal Finance. “Businesses without a plan can easily get off-target, and revenues will suffer as a result.”

The current surge in the popularity of Canadian startups shouldn’t lull future entrepreneurs into a false sense of security. It’s ever-important to have a concrete business plan to prove to investors that your business is unique and viable amongst the hundreds of other emerging startups. In fact, the ongoing momentum of Canada’s technology startup sector is a direct result of a few startups doing extremely well based on their detailed business plans.

“In the last 18 months a series of large venture capital investments have signaled an important shift in the Canadian technology startup scene,” writes technology reporter Shane Dingman. “This is not a story about out-of-control valuations, but rather a case of a new class of maturing businesses reaching the stage where their market opportunity is now being matched by large investments.”

Last year, I was interviewed by The Globe and Mail about this very topic. I told the reporter, “In my experience, a startup cannot successfully recognize a need to pivot, a need to bolster specific resources, or a need to add to its technology pool when it is being purely reactionary.” I went on to say that, “Without a considered focus, a sound strategy, and the discipline to reassess a plan regularly, investment decisions are solely based on the need to fix issues as they arise.”

You may be asking, “Well Cameron Chell, I don’t even know where to start?”

That’s ok. That is part of the planning process. There are a number of organizations, incubators and advisory groups that are able and willing to help startups facilitate their dreams and reach maturation. Futurpreneur is one of the many organizations dedicated to helping grow startups.

Late last year, Prime Minister Trudeau announced his government’s plans to support startup growth. Dubbed the “new innovation agenda”, the Liberals plan to invest $200 million per year over the next three years to support technology incubators that provide startups and entrepreneurs with practical and logistical support. This is indeed more positive news for the Canadian startup community. But, just because more startup funding may be available over the next several years doesn’t place any less importance on business strategy, planning and performing detailed due diligence — fundamentals like these will always be crucial, regardless of startup and investment environment.