This is part 1/11 of the Write Your Business Plan series: Section 2: Putting Your Business Plan into Action.
Funding for your startup can come from many different sources: friends and family, enterprise capital, angel investors, and SBA loans, to call a few. A very good business plan will help investors understand your vision.
But before you begin raising money, one of the most beneficial uses of a business plan is to assist you determine whether the idea is price it. While it might not function exactly like a crystal ball, a well-executed plan will show whether this is a viable idea before you spend a penny.
There are financial and lifestyle realities you will need to deal with to begin and run a business, and here are some key inquiries to ask yourself to see if it’s a realistic endeavor:
- What initial investment will I would like to begin my business?
- What are the company’s expected profits in the first years?
- What form of compensation or profit sharing can I expect to take home?
- Do I have evidence that I’m delivering a solution that customers actually want?
- Can I keep my day job until I start my business?
- Do I have a financial and emotional support system that may help me get through the startup years?
- Is this a concept I’m really passionate about?
When answering these questions, be honest with yourself to get clarity on whether you actually need to implement this concept. (*2*) requires a lot of fearlessness, risk-taking and luck, but taking the time to ask yourself the hard questions and arming yourself with as much information as possible offers you the best likelihood of success.
Continue reading this section to learn learn how to develop your plan, or order a copy of Write Your Business Plan from the Entrepreneur Bookstore.