Understand these key principles before you even think about writing a plan to build your own business.
Most business advisors I know will say that writing a business plan is the first step to starting your own business, but I believe that a better first step is to do a self-analysis of your real drivers, strengths and assumptions before committing to this lifestyle.
As a result, you may tune your plan, or decide that running your own business is not the dream you thought it might be.
For example, if you see starting a business as a get-rich-quick solution, or you are trying to escape having a boss, or hate taking risks, you probably don’t need the stress of writing and trying to sell a business plan to tell you to seek other alternatives.
Consider the following principles and how they apply to you as you do your reality check:
1. Identify your passion first and list alternatives to get there
For an inventor, the product is everything and managing cash flow in a business may be the least satisfying part. Working for a well-funded existing company or pursuing your dream as a hobby may be more satisfying and productive. You can’t really succeed in life if you are not happy.
2. Assess your resources as well as funding sources
You may dream of developing a new silicon chip technology, but a bit of research should tell you that most disruptive solutions take billions in investment and more time than you can afford for acceptance. Perhaps you should find a satisfying challenge that is more affordable and less painful.
3. Lead from your strengths and interests rather than hearsay
People are quick to point out easy opportunities for you, but sounding attractive and being attractive are two different things. Trust your insights, and if you have to ask for business ideas from others, I recommend that you stay where you are until you’re certain of your idea and solution.
4. Evaluate whether your desired opportunity is new or old
If an opportunity has been around for a long time, then it has probably been tackled many times, with bad results. I recommend that you look for new or emerging opportunities in new markets. Time is of the essence in business, so responding quickly with a solution always improves your odds.
5. Calibrate your ability to rise above competitors and copycats
In business, there will always be someone out there with more money, a better location, or more resources, ready to take your idea and squeeze you out. You need intellectual property, such as a patent, trade secret or process expertise that will be a barrier that you can defend.
6. Assess your connections, both social media and financial
If you have no followers on social media, connections to influencers, or business advisors, you will be unlikely to get support for a new business plan. More important than a business plan may be early networking, a website and blog and building relationships with key industry experts.
7. Test a prototype solution before you build a business plan
Successful businesses are built around solutions that work, have a market and are scalable. Many of the business plans I see are built around a dream, with idealistic costs, margins and customer demand. Temper your passion with feedback on a minimum viable product before committing.
8. Check your tolerance for risk, uncertainty and change
Starting and growing a business requires that you be comfortable, even excited, by the challenges of the unknown. If you see a business plan as a way to remove uncertainty, then you should not create one, as it will be obsolete almost immediately. Every business is a work in progress.
9. Calculate your need to acquire missing required skills
Every successful business requires a focus on providing solutions, business management, and customer service. It is possible to partner with others to complement your skills, but you should consider taking time to gain experience in these areas or further education before starting a plan.
10. Test your physical, mental and emotional stability for the journey
New business creators often defeat themselves by neglecting their physical, mental and emotional health. You need to be confident that you can withstand the mental and emotional stress, find time for the family, and find a balance of non-work social and physical activities.
In reality, a business plan is best used to validate and solidify the principles and assumptions outlined here for your situation, as well as to communicate these to investors, your team and other constituents.
The thinking and writing involved are best done by you, rather than an expert third party. Starting and running a business is a very personal thing, so make sure you are ready.