The World's Shortest & Simplest Business Plan
The term Business Plan has different meanings depending on its purpose. A business plan for an investor is not the same as a business plan you use internally. The complexit of an investment business plan often scares poeple away from making a plan for internal use. But an internal plan can be very simple - Who What When Where and How.... but in a little different order.
WHAT - am I selling? You'd be amazed at how many people can't describe what they sell concisely and clearly. Write it down, memorize it. Tell it to friends and relatives. See if they get it. It shouldn't take more than 30 seconds to say. Assume you have run into your former boss in an elevator. Your former employer is a perfect customer for your new product. Your ex-boss asks "what are you doing these days." You launch into a long narrative, only to find that your ex-boss has gotten off the elevator before you even got to the real core of the product.
WHO - will buy it, and who decides what will be bought? Even something as widely used as toilet papers, is not bought by everyone. In a family, only the person who goes to the supermarket will actually buy it. Does that person take requests, or make the decisions on his or her own. Looking at this question might well steer you away from developing a teen-oriented toilet paper product. Teens use the product, but they don't buy it or think about the choices.
WHERE - am I going to find my Who? If you want to sell to teenagers, you need to get yourself in front of teenagers. Having a store in an office building isn't a good plan. A more subtle example is why I've never done well at these "lead sharing" network clubs. Yes, everyone there is representing a business, and I do business law. But most people are either sales people for big businesses (and sale people don't get to choose or even recommend attorneys) or owners of small sole proprietorships, who are decent, but not great referrals for me because there are easier ways to reach them than by getting up at 6:30 am every Wednesday.
HOW - do I price this? Answering this one requires that you know what other people charge for your service or product and how much it costs you to create. It's not always just a matter of thinking of how much profit you want to make and additing it on to the costs of production and sales. The market place allows some cosmetics to sell for way beyond a normal profit margin, while computer components right now have a tiny margin.
When - am I going to step away from the computer and do it? Set a realistic schedule, and stick to it.
I can't guarantee that you will have a successful business if you use this plan. But I can guarantee that if you think through these questions and write clear and concise answers, you will do better (or less poorly) than if you don't think about these questions.
