Once you are confident with your concept, one of the first things that an entrepreneur will do is write a business plan. There are several reasons to do this:
1. It’s the least expensive part of starting a business and will pay the highest dividend.
2. It will make setting priorities easier.
3. It will help to explain your business concept.
4. For most business to succeed, it is a must have.
I’ve written about a dozen business plans that I have started or thought of starting. I have done it for friends that wanted some help. But in all cases, I decided that the business plan was going to be a work in progress that needed constant attention and updating. A business plan should evolve over the entire life of the company. It’s not just something that you create at the beginning and then put in the drawer. It’s a tool like a set of drawings for an architect that can be modified while the building is taking shape and can be referred to later when modifications need to be made to the structure.
So just what is a business plan and what should it look like? If all you intend to use it for is the reasons I have just listed, it can be pretty simple. Remember the KISS rule, keep it simple silly.
Start with the following:
1. The product or service you plan to create.
2. The value it will have to those who will use it.
3. Why you think your idea has merit?
4. What you hope to accomplish with the business, besides make money?
5. How will it make money?
6. What will the money be used for?
7. Will your business need funding? Initially or soon thereafter.
8. What resources will the business need?
9. How will the business be structured, LLC, C Corp, S Corp, Sole Proprietorship etc?
10. How long do you think it will take to be profitable?
11. What is your alternate plan?
After writing down answers to these points, and anything else that comes to mind while reviewing them, you have the makings of a business plan, at least an informal one. You may have noticed I didn’t list “give it a name”. That’s because the name should reflect the idea, and not the reverse. Sometimes naming the company first can misdirect the intentions you have with the product or service you are planning. I don’t want to understate the importance of the name, just when you should do it. Naming a child before it is born is a real frustrating and stressful exercise.
Finally, once you’ve put things down on paper you are ready to start working on all the things that you’ll need to form the business and get things rolling.