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.
Step 1: Find someone who has already done it successfully
Step 2: 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.
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 selling
Who you are selling it to
How much they will pay
How often they will buy
Why they will buy from you
What you do better than anyone else
Next write about your goals and what you will need to make a reality.
How much you want to sell in the first, second and third years
How many new customers and repeat customers
How you will make people aware of your business and how much will it cost
How will you convince them to buy from you and how much will it cost
Then write about how much it might cost and how much money will you need.
How much help will you need and how much will it cost
What supplies, equipment, space and other things will you need and how much will they cost
How much money and time will it take
When you are finished revising your plan, go back and add the sizzle. Three things can help you add sizzle and credibility to your plan. The first is using statistics from credible sources. Statistics can help to make your plan more believable. The second thing is to use internet links to amplify and clarify the significant points in your business plan. The third thing is to add videos from subject matter experts to corroborate your points.
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.