You’ve probably heard that the first rule about starting a business is you have to write a detailed business plan. Well, we disagree.
The point of a business plan is to show others that your idea has monetary value. If you aren’t interested in attracting investors, save yourself the time and instead prove out to yourself that your million dollar idea is really worth a million dollars.
So, how do you do that? By validating the assumptions and opinions that currently make up your idea.
1. Verify the Problem
Your product needs to solve a problem or fulfill a need in order to be valuable. Otherwise, why would someone buy it? This problem needs to be important and pervasive. If it isn’t important, people might not want to spend money to solve it. If the problem isn’t pervasive, you are going to have a tiny target market.
2. Verify the Solution
Starting out, your solution is based on your experiences, but you are not the customer. Go talk to dozens of people in what you think is your target market. Find out if:
- The solution solves the problem
- This is actually your target market
- What ways you can improve the solution
3. Verify the Business Model
Do some calculations to estimate your expenses and income. Will the costs associated with running your business be high? Will the price and income be low? Your business does not need to immediately turn a profit, but it will eventually need to be profitable to stay open.
Once you have completed those three steps, you are ready for the rest of your business plan:
- Sales Plan
- Marketing Plan
- Product Plan
- Finance Plan
Keep it high level at first and work in the details as you learn and experience more. Our business plan is currently 1 page long and that works just fine for us.