Do you need a business plan? Why it’s so important to your business’ health.
In this series of 19 short articles, StratPad’s founder discusses the fundamentals of starting and running a small business.
Today he tells us why a business plan so critical to business success:
Q: You’ve got an idea for a business – Now what? Do I need a business plan?
A: That’s a question I get actually all the time, so I got an idea in my head. What’s the best way to bring my idea to my reality? Well, the first thing is let’s do that. Let’s figure out whether your idea has any merit in the shortest amount of time and with the least amount of money. That’s the first step to making a business plan. That makes sense, right?
Here’s the first thing I would do. First of all, I would sit down and sketch out my idea so that it was one or two paragraphs on a piece of paper:
“I want to deliver this offering to this type of customers.” Then what I do is I would go out and I would find fifty people who fit the profile of my particular customer and I would talk to them and ask them, “Hey, if I was going to deliver this, do you think it’s something that would be interesting to you? If yes, how much would you pay for it? If no, why not?”
Do that fifty times. At the end of that week you will know way more than you knew ahead of time.
You can then go and do the same thing with a group of suppliers. If supplies are important to your business model, go and talk to as many potential suppliers as you can and ask them, “Hey, if I was going to buy this stuff from you …” Go through those questions.
Another way of determining whether there’s even appetite is to create a simple website. It doesn’t cost a whole lot. Drive some Google Ad Words to it. If you don’t know what Google Ad Words are, here’s a real good chance to figure out for $100 or for $200 you can do a very very inexpensive market test to determine whether any one even cares the great idea that you have.
That’s the first step to creating your business plan. Once you’ve thought through it all, you’ll have a much better understanding of whether or not your idea is worth pursuing.