Making the business plan for your first start-up
First of all congratulations if you came up with an idea and even more applause if you decided to put this idea into practice!!! The reason why you should be very happy with yourself is that very few people can actually generate ideas. And the number of them who will go the extra mile and try to give life to their idea is literally ‘tiny’. So, congratulations one more time!
What is a business plan? In few words a business plan is a documented analysis of your idea that proves its feasibility and makes you feel more confident about your thoughts and targets. Your targets will have to be specific, measurable, attainable, realistic and time-framed (SMART). If the plan is well structured and with accurate data more people will start believing in it. Therefore, composing a good business plan can be crucial for the outcome of your start-up.
The very first thing you need to do when you start writing your plan is ‘Market Research’. You wouldn’t want to introduce a product/service to the market that is already available or very similar unless you have some extra ‘spice’ to add on top. If you believe your idea is revolutionary and nobody else came even close, then you need to do the math and estimate how many people would benefit from it.
Every angel or venture capitalist will ask you the following questions again and again. ‘What is the production cost’, ‘what is the selling price’ and ‘how big is the target market’. Although these questions are very fundamental and easy to ask, it is very tricky to get accurate and realistic answers. A business plan that has been designed after careful thinking and thorough research in order to get the most pragmatic figures as possible, it will have minimal chances to fail.
The second most important factor in a business plan is the budget. You wouldn’t want to start a business that requires a big capital from day one, especially when you are negotiating with a potential investor. What they want to see is that you can afford the initial steps and you are just looking for an extra boost to speed things up. In simple words that means you have to be the manager, the technician and the salesman of your business. You can’t really afford to hire others at the early stage of your ‘enterprise’. Therefore, careful consideration needs to be taken in order to avoid unnecessary costs.
In a following article I will focus on the spin-off companies, the science parks and the available funding sources.
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