Since the mid-1990s, people have been posting business plans online. Even so, many businesspeople still ask: Is this a good idea? Does it work? Is it safe? Is it effective? In this article I'll help you understand the reasons why you should--and shouldn't--post your business plan online, and provide helpful advice for avoiding problems.
Why Post a Plan Online?
Business plans are about what's supposed to happen. They cover who'll do what, when, and for how much. That kind of information is intended to be readily available. At its best, the plan is like a desktop reference.
When you post a plan online it should be password-protected and secure. Share it only with those who should see it. That might be investors, lenders, partners, managers, a spouse or others.
An online plan is easy to use as a reference; it's always quickly available on most any computer.
Another benefit is that online plan is easy to revise. Just upload the revised version to replace the previous version, and in that moment everybody using the plan goes to the latest version. Compare that convenience to having to courier copies of the plan to key readers every time you want to revise it.
An online plan is also easy to distribute. Don't think that posting will help you find investors (see below), but do think that once you've struck a relationship with investors, you can use an online plan to take the next steps. These relationships usually start with an e-mail, a conversation, or a summary memo of two to five pages. The plan is the next step. As that next step happens, a web URL along with username and password are very convenient.
Yes, it's safe to post a plan online. Sure, hackers who try can break the code and gain access to business plans, but why would they bother? Your business plan is worthless without the team to implement it. If first prize is a good plan with a good team to make it happen, then the booby prize is a thousand good plans with nobody to implement them. Every truly good idea is already obvious by the time it's written into a plan; the key to success is the team behind it. Hackers can make more money collecting bottles on the highway.
Remember that a good business plan is never done, and all business plans are, in a sense, wrong. A real business plan is a process, a live business tool that adapts as assumptions change and the reality of doing business reveals itself.
Why You Shouldn't Post Online
Don't post your plan online in order to find investors you've never met. It won't work. The idea sounds very attractive, doesn't it? It would be almost like fishing from a pier; bait your hook, sit back, and wait for the fish to bite. The problem is that it probably won't happen.
I won't say that it never happens. I know of one deal that started with a plan posted on postidea.com . In that case, the entrepreneurs posted their plan, waited an appropriate time, and were contacted by an investor who eventually invested in the plan. So it does happen, but very rarely.
One important problem with posting for investment is that mainstream professional investors are seldom going to browse websites looking for plans. Published numbers vary widely, depending on definitions, but there are approximately 1,000 venture capital firms and maybe 20,000 angel investors in the United States. The most visible investors are bombarded with proposals. They don't have time to sift through all the proposals they get, much less go trolling for plans on websites. The deals chase the money. The money doesn't chase the deals.
A second problem is that good startups carefully target potential investors. Acquiring an investor isn't just about getting money; it's about being in a partnership, over the long term, with deep strategic, tactical and day-to-day management implications. With savvy startups actively seeking them, investors have no need to search for opportunities on their own. Certainly, some investors are trolling online for business relationships which potentially could be deep and long-lasting (so here again, there are exceptions), but the odds aren't in your favor.
A third problem is that mass distribution of your plan kills its credibility. Investors don't want a plan that everybody else has turned down. Every investor wants to think they're one of a select few who've seen the plan. Most investors want to be one of three to five investors involved, while few investors want to be investing alone.
How to Post a Plan Online
There are several internet sites available for posting your plan; some charge for the service, some are free. I recommend that you have password protection for your plan because that adds credibility. Personally, I'm very skeptical about paying for sites that claim investors will find your plan there, but it has worked for some. Combining that idea with a careful search for investors, getting them to read your preliminary feelers and then seek out your plan, isn't a bad idea either. On these sites the buyer must be aware.
True, there are reasons to post carefully edited subsets of plans where anybody can read them, which is good marketing, as long as the confidential parts are removed.
The author is an Entrepreneur contributor. The opinions expressed are those of the writer.