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Writing a business plan is probably the number one thing that would-be entrepreneurs get hung up on, and as it turns out, is not as big of a deal as we are often led to believe. Here is a bit of what Guy Kawasaki has to say about writing business plans, and then I'll follow with my own personal experience of doing so.

The Holy Grail (from The Art of the Start by Guy Kawasaki, chapter 4)

"The modern-day equivalent of the Holy Grail is the business plan. It, too, is supposed to satisfy everyone (investors, directors, founders, and managers) and induce magical effects on those who partake of it- specifically the irresistable urge to write a check or approve a go-ahead action.

Also, like the Holy Grail, the business plan remains largely unattainable and mythological. Most experts wouldn't agree, but a business plan is of limited usefulness for a startup because entrepreneurs base so much of their plans on assumptions, "visions", and unknowns."

Tha being said, if you are going to move forward in a business with a team on board, you do have to have a formal plan. Here are some of Guy's tips to keep in mind when writing a business plan:

-Write for the right reason: Ironically for most entrepreneurs the business plan itself (that is, the document) is one of the least important factors in raising money.

-Pitch, then Plan: If you get the pitch right, you'll get the plan right. The converse is not true.

-Focus on the Executive Summary: It is the most important part of your business plan because it will determine whether people read the rest of the document.

-Keep it clean: Increase the effectiveness of your entire business plan by keeping it short, simple and effective.

-Provide the right numbers: Five years of financial projections- that don't have the $25-50 million spike at the end of the fourth and fifth-year sales.

-Write deliberate, act emergent: Use historical data, technology, competitive analyisis that is influenced by and practical to everyday realities in business.

"So, write as if you know exactly what the future holds, but react opportunistically when you encounter reality.

Rest assured that many successful organizations have chnaged their business models along the way. This means you have to conserve your capital so you have money to make it through the changes (bootstrapping coming later this week), and you have to be willing to alter your plans.

The worst thing you can do is to write a deiberate plan and then stick to it simply because it is "the plan". If you're successful, no one will care if you didn't follow the plan. And shame on you if you fail but you did."

My Experience with Business Plans

When I started my first business, I didn't know I was supposed to write a business plan. I just had a vision and worked to bring it to life. We were funding it ourselves, so I didn't need it to raise money. Frankly, I would have had to adjust it several times, because we had to figure out what was going to work for us. I never put together a business plan for that business, and now it's sold (and dead- maybe the new owner should have had a plan!).

About a year later, I had an idea for a high end Bed and Breakfast on an amazing property in Seattle, WA. I decided to see if I could make it happen. That's about the time I met Kimber through an online forum. She offered to help me write and put together a busines plan that I could take and shop around to different private investors, angels, and venture captialists. I was doing a lot of research to figure out who might be the best to fund this particular project. Although I had a vision for the whole, I got really hung up on the numbers. I bought a business plan writing software program (Palo Alto) and worked on it for months. I never could get past the financial projections. As it turned out, the numbers didn't make sense, and I ended up putting that idea on the shelf (although I may go back and buy that property- I love it!).

I've since worked on a number of smaller projects that haven't needed a formal business plan to speak of. However, the next project I'm getting ready to take on will be a larger scale business and I will be looking for funding to expand it. So it will be back to the drawing board for me!

Just keep in mind what a business plan is for and don't let yourself get hung up on one if you have a passion to be in business! (Maybe Kimber will pop in and give her two cents on this subject! It's a valuable two cents!) Also, if anyone would like to share what you are working on or perhaps an idea of a business you'd like to start, send me an email. I'll choose one I really like, feature it on NLL, along with a link to your site (if you'd like) and send you a brand new copy of The Art of the Start by Guy Kawasaki.

More Art of the Start tomorrow... Bootstrapping! (This should be something PF Bloggers like!)

For more about Guy Kawasaki, check out Art of the Start.com (his site) as well as Guy's blog