When you have a great idea and want to start your own business the first question is of course – Where do I begin?
This is the question when I first started looking into starting my own business and I’m currently about half way through getting my business off the ground.
So I guess you’re thinking ,ok thats great for you that you’re half way through setting something up, but where should I start?
The beginning of any business is of course an idea. Once you have this spark of inspiration you want to make sure its something that you think you can pursue. So its research time! At this stage it doesn’t have to be hardcore documented research. Its more like putting your feelers out there and evaluating, post the spark of inspiration (at which point you are probably thinking you are definitely going to make a million out of this one), whether you think this idea is initially worth pursuing. Things like talking to a close friend or family member and doing a quick Google search are pretty helpful at this stage to figure out whats going on in the industry your idea is related to. For example if you are thinking of doing an online flower pot business then get on Google and look up flower pots. Then chat to a friend or family member about your idea and they will probably say “oh so and so does something like that, have a look at what they are doing”. If you have got your idea past this stage the next stage is sounding out draft of a business plan.
Why do a business plan you say my idea is so great that I can just start selling my flower pots (or doing whatever it is your great idea is)….
the truth here is that by doing a quick and dirty draft of a business plan you get a much better idea of whether your idea is actually robust and how viable it really is. A business plan, even a quick and dirty(Q&D) one, is going to tell you straight away how robust your “spark of inspiration” really is. If done properly & honestly it is going to force you into having a good hard think about your business idea and help you make it a success
The basic areas that I cover in a Q&D Biz plan are:
Company purpose – make this a single sentence that says, clearly & plainly – no technical jargon, what your business is all about.
Problem – what is the problem of the customer? how does the customer addresses this issue today?
Solution – what is your company’s value proposition to make the customer’s life better? I often use “customer case studie” to demonstrate this.
Why Now – What is the historical evolution of your category? Are there any recent trends that make your solution possible?
Market size – identify your customer, what is the total available market? What Share of market will you hold?
Competition – Who are your competition? How will they react to you entering the market? Figure out & list your competitive advantage
Product – Describe your product line (form factor, functionality, features, architecture, intellectual property), outline a product development roadmap.
Business Model – The revenue model you will use, the avenues of revenue for your business, account size, sales & distribution model, Customer list
Team – Who makes up your management team? What expertise/experience do they have?
Financials – Profit & Loss statement, balance sheet, cash flow statement
By using the above areas to do a Q&D Biz plan you will gain a much better grounding for further development of it & your business. It will also help you break down many of your assumptions as you will have to start to do more research into the industry your idea sits within.
Some good resources for furthering your Q&D Biz plan are:
Plan to Succeed (PDF) – Buisness Plan writing Tool
How do I write a Business Plan
Business Plan Definition Wikipedia
Book of the Post: Rich Dad, Poor Dad
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Tags: business model, business plan, business planning, Company purpose, competition, financials, market size, plan to succeed, problem, product, soltuion, team, why now
