A new way for entrepreneurs to plan
The "business plan" may have fallen out of favor, but entrepreneurs still need to plan for the future. Enter "business modeling".
Today is the first day of classes for me here at Belmont University. I love the rhythm of the academic calendar. The start of a new academic year offers a sense of renewal. But, there is something special about this one.Skip to next paragraph
Jeff is the Jack C. Massey Chair in Entrepreneurship and Director of the Center for Entrepreneurship at Belmont University in Nashville, Tenn.
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As those of you who are regulars readers know, 2010 has not been the best of years for me personally. Early in the year, my wife and I lost our oldest dog Keb, who died much too young at the age of eight. Soon came the loss of my father to a stroke, which happened at the same time as our daughter and her husband had been flooded out of their home in the Great Nashville Flood of 2010.
While life seems to be getting back to normal, we can't help but being haunted by the ghost of "what's next?"
So the fresh start that comes with every fall semester is particularly welcomed this year.
The fresh start is also exciting to me as after many years of teaching entrepreneurs, I am in the middle of a renaissance in how I help my students learn about planning for their entrepreneurial ventures.
Unlike many of my colleague around the country, I have not completely abandoned the good old business plan. I am simply in the process of relegating it to its rightful place. Business plans are certainly useful tools for certain situations, such as raising funds or selling a business.
Business planning is a critical activity for any entrepreneur, but we seem to have gotten lazy and assumed that learning the process of writing business plans is the be all and end all of planning.
This laziness has included entrepreneurs, investors, and those of us who teach entrepreneurship. We are all guilty of a misguided understanding of what is essential about planning for a new and growing venture.
Enter a small, but growing body of work on business modeling.
Business modeling is a way of conceptualizing and planning for a venture that looks at it as a whole. Business plans, on the other hand, are much more like a series of short stories that may or may not loosely hold together.
Business modeling is all about the integrity of the planning process and the importance in internal consistency among the moving parts that make up a successful venture.
As with any new way of thinking in business, there is no clean and simple text for us to teach from. What we are learning about effective business modeling comes from a variety of places and disciplines, each of which is shedding a little more light on what makes a successful business model.
Some of the best work out there so far includes:
Osterwalder et al - Business Model Generation
Mullins & Komisar -- Getting to Plan B
None of these works offer a complete view of business modeling, but each offers insights on part of the process.
Well, it is time to get ready to head for campus. More than most years, I am truly thankful for the fresh start this new semester offers.
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