ho hasn't sat across a table from a friend and outlined a "million dollar idea?" In reality, most of these ideas don't get beyond a sketch on a napkin. That's because business success takes more than a good idea. It takes careful planning and good management.
Does your idea have what it takes to survive in the hard, cold world out there? There's only one way to find out without losing your shirt.
Plan.
Describe your business concept in 200 words or less
- Have I thought my business idea through well enough to describe it simply?
- Who will my customers be? My suppliers? My competitors?
- Have I figured out what my start-up costs will be?
- Have I done enough research to begin work on my Business Plan?
Your business concept may have come from previous work or educational experience, a hobby or special talent you have, or an unmet need you believe many people share. Whatever its source, your idea should stand out in at least one of the following ways to have a good chance for success:
NEW. Is your product or service new to the world or novel in some important way?
IMPROVED. Is your product or service clearly better than competitive offerings, based on lower price, quicker delivery, higher performance, greater variety, more convenience?
TARGETED. Is your product or service targeted at a market segment that is unserved or underserved by your competitors? Is the market segment large enough to make your business profitable?
UNIQUE COMBINATION. Can you offer related products and services in a single location in a way that competitors can't match? Can you make, sell, and distribute products in a way that gives you an economic advantage?
If your business concept meets at least one of these criteria, you're ready to move on to Worksheet 1: My Business Concept in 200 Words or Less.
Reality check: how to evaluate your concept
In order to convince yourself or anyone else that your business idea has a good chance of success, you'll have to do some legwork. Depending on the type of business you're planning, there are a variety of questions you must answer to make sure that the risk-reward scale is weighted in your favor.
What follows is a list of questions to guide your information-gathering process. Use this list to tailor your own list of key questions—and plan to spend several days or weeks digging through publications and talking with experts. You'll find a list of resources behind the Sample Business Plan in this book. This is the time to challenge yourself. Be tough. Be persistent. Get the facts you need to succeed.
Worksheet 2: Research & Reality Check
Does your dream hold water?
Your work on the Reality Check will reveal a lot about the strengths and weaknesses of your business concept. You may find you need to make some adjustments in response to your research—but far better to shift gears now than later, when you're playing with real money.
This preliminary research will also prepare you to tackle the rest of your business plan. Although you will need to do more in-depth research to develop financial projections for the Marketing, Management, and Money sections of your plan, your initial reality check will get you off to a strong start.
Preparing to write the executive summary...
Although you won't write the Executive Summary until you've completed the rest of your plan, it's helpful to keep the requirements of the Executive Summary in mind throughout the planning process.
Though only a brief two pages, the Executive Summary is the most frequently read part of any business plan. It gives bankers and other investors a chance to evaluate your business concept quickly and decide if yours is one of the plans they want to consider further. It's also the best opportunity to present your business concept clearly, concisely, and convincingly to those who matter most to your success.
Write your executive summary in the style you're most comfortable with
You can write an Executive Summary in a variety of ways. One way is the straightforward "synopsis" style that communicates key information in short sentences under several subheadings. Another way is a narrative style that allows you to "tell the story" of your business plan with more drama and excitement, using longer paragraphs and fewer subheadings. An example of a synopsis Executive Summary is included in the sample business plan at the back of this book.
Whichever style you choose, the Executive, Summary should be well-written and concise; and no longer than two pages. It should capture the highlights of your completed business plan and answer all of the questions on Worksheet 3: Executive Summary.
CONGRATULATIONS!
You've completed step one.
It took a lot of effort, but you're well on your way to developing a plan that will serve you well as you launch or expand your business. With all the preparation you've done, the next three steps—Marketing, Management, and Money—should come a little bit easier. You've already proven you've got the Moxie to get the job done. Onward!
Northern Initiatives can be contacted at (906)228-5571
