The first step in writing a business plan is to decide whether your idea is a business opportunity – or just a neat idea.
In this post I’ll share some insights on new venture creation as discussed in my class for Post University’s Online MBA Program. I’ll also provide some links to simple Business Plan Templates to get you started.
Business Opportunity or Neat Idea?
Most entrepreneurial startups are copies or variations of existing businesses or ideas. This is actually great news because it makes it easy to research what works, and what doesn’t in the business you are interested in. Here are three simple steps you can use to get started thinking about your business plan:
1. Create a clear picture in your head – and write it down. What is your personal vision for the business. What will it look like, who will buy from you, why will they come, where will they come from and what will your life be like as an entrepreneur.. This kind of simple visioning exercise is important to set up the next step – research existing businesses and testing those assumptions.
2. Look for similar businesses. Use the internet to look for similar businesses both in your local market (where you will sell) and outside of your local market. Similar businesses should include both those just like the one you want to start – and other options that customers would consider. If you’re thinking about opening a new type of gym – you’d have to look at all of the options people have for going to a gym – not just your type. Looking for comparable businesses outside of your region is really useful – because you can reach out to the owners and ask them important questions about their success. Entrepreneurs are generally happy to share general knowledge if you’re not going to be a competitive threat.
3. How will you make money? Even the best idea isn’t a business unless you can generate revenue that exceeds your expenses. Use this research to consider whether the return on investment is going to be sufficient to make it worth your while. If you find that there aren’t any businesses like the one you want to create – then you ought to consider it a warning. Don’t assume that the idea hasn’t been thought of – instead consider that someone thought of the idea and decided it wasn’t an opportunity. This isn’t a “stop sign” for your work – but it is a light of caution.
Start with a Solid Template.
There are thousands of business plan templates out there. You can even find (and buy) some pre-written plans. As with all things, the key word is “buyer beware”. Don’t buy a plan to use it as yours. The first test of entrepreneurship is whether you have the patience, persistence, creativity and smarts to put together your own plan. The process of assembling the plan will be a learning experience – and you’ll need those lessons to succeed. Use other plans as references – but your plan must be your own.
Here are some solid starting points to consider:
- SCORE has some great templates – and is a respected resource: http://www.score.org/resources/business-plans-financial-statements-template-gallery
- Here is one of the specific SCORE templates that I share with MBA Students – as a guide to get started and thinking about the business.Business-Plan-Startup
- Canaan Partners also has a fantastic “Entrepreneur’s Pitch Workbook” which gives you the view from an investor / banker’s point of view.
So that’s a start. From time to time I’ll share tips either in response to your requests or those from my MBA Students.