Step 1: Be Prepared
Editor’s note: This is the first of eight installments for SUCCESS‘s 3rd annual Start Small Win Big entrepreneur challenge.
Welcome to Week 1 of the Start Small Win Big challenge! Whether you have a small biz, blog or some other creative gig, you must think like a Boy Scout and be prepared if you want your efforts to succeed.
Writing some form of plan—whether that’s a one-page, executive summary or a full-on business plan—isn’t just something you do to attract investors or obtain bank loans. Your plan also serves as a road map to get your business idea where you want to go. BPlans.com calls the former a “one-page pitch,” and even if you never show it to anyone else, it is vital to helping you plot out the next steps toward achieving your goals.
This week’s homework is to write a one-page summary or pitch for your business that answers these 7 questions—the factors you’d consider when writing a traditional business plan.
1. What is your business model, or the new market/product/service, you want to introduce?
2. Who are your competitors and why is your business model different from and better than theirs? (Everyone has competition, by the way—don’t try to convince me you don’t.)
3. Who will be your customers? Be specific with a demographic profile of your ideal, target customer—whether that’s a hip, techy 20-something or a middle-aged single mom.
4. Who is on your team and what experience, skills and connections do they have? This includes any business partners, employees, investors or advisors you have on board, as well as any companies with which you’re partnering in order to launch or expand.
5. How will you make money and how much do you expect to make? Create realistic sales projections—monthly for year one, quarterly for the second year and annually for the next five—for your new business or growth initiative.
6. How much startup or expansion capital will you need to accomplish your goals, and how much do you already have? If you do need more money, where do you plan to get it?
7. How will you market and promote your new business or expansion? Be specific, including the marketing and advertising methods you’ll use as well as your estimated marketing budget.
As you go through these questions and create your one-page plan, you’ll inevitably find flaws or questions you don’t know how to answer. It’s OK; in fact, that’s what writing a plan is for. Don’t try to gloss over the weak points. Instead, figure out how to remedy them so you can keep moving forward. You might need to adjust your business model, financial expectations or marketing plans to achieve your goals. The time to do that is now—not while you’re in the middle of things.
Share in the comments below: What flaws or unanswered questions did you find that you hadn’t considered?