You’ve got a great idea and want to start a business but you don’t have a business plan. You’ve most likely heard the quotes to push you to start the business. To retell some of the familiar ones: “the only thing we have to fear is fear itself.”, “whether you think you can, or you think you can’t–you’re right” or “It’s never crowded along the extra mile”. How about, “you have to spend money to make money’.
But charging up the hill like Teddy Roosevelt doesn’t sound so reasonable when talking about using your life’s savings to start a new business. Just the thought of all those dollars flying out the window will give most people the terrors.
There is a way to launch a new business without fear. The next 3 steps will tell you how.
Find someone who has already done it successfully
Someone may be doing the thing you want to do successfully. When you find them, you will be able to validate the fundamental part, if not your entire business model. If someone else is doing it, then you should be able to do it, also. Another easy way to validate your business model is through a trade association. You can find the names and contact information for a large number of industry and trade associations on the internet. You can talk to the folks at the association and ask for feedback.
Find 10 people who will buy what you want to sell at your price point
Ask 10 people if they would buy what you are selling at your price point. If the results you get with 10 are not conclusive enough for you, then ask more people or change your questions. Keep asking people until you comfortable with the answers you are getting. Asking questions before you’ve spent your money is a lot easier on your bank account than asking the questions after the money is gone.
Assemble an interview packet for yourself to help you get actionable and useful answers. It might contain a product or service brochure and interview sheet. Use a non-disclosure agreement to protect yourself from someone taking your idea from you. You can find a free basic non-disclosure template here.
A blisteringly clear description of what you are selling is an all important part of a product discussion. The description should include a photo, the price, price options, a list of the product or service features and the benefits a customer might receive from each feature. Along with the benefit, explain why the feature is better than competitors and the value the customer might expect to receive.
The answers you get from interviewing people can help you decide if you are ready to invest the time and effort in preparing a business plan.
Make a Business Plan
Start with a simple plan. It can be rough. It need not be polished. In the beginning, only you will see it. So, jump in and get your feet wet. You can find a wide array of resources on the internet. You can add polish and sizzle as it develops.
Start with a simple outline and then build more detail into it as you progress. Go a step at a time. Write first about the things you already know:
What you are sellingUse a business plan
Next write about your goals and what you will need to make a reality.
Then write about how much it might cost and how much money will you need.
Now you have enough information to make an informed decision to go forward or to set the idea aside or go back to the drawing board.