Which steps come first when planning a new business?

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Finance & Capital mentor Guy Kawasaki responds to the following question from an inc.com user:
I'm wrestling with writing a business plan for a fresh-out-of-the-box business, finding out how to protect my business idea and trying to get a nondisclosure agreement prepared so that I can gather information more easily. Could you please suggest an order of importance so that I can do this right the first time?

Guy Kawasaki's response:
A good start is to write a two- to five-page executive summary that explains your business but does not give away your idea or technology. Then proceed to write the business plan. Your business plan should include a description of your start-up and how you plan to market, develop, produce, and finance your new venture.

Don't be overly concerned with someone stealing your idea. Venture capitalists and other investors would soon lose their credibility and clients if they stole ideas from entrepreneurs. If you're worried, visit a patent attorney before discussing your idea with potential investors to determine if your idea can be patented and thus needs further protection.

In my experience, most professionals and high-tech investors won't sign nondisclosure agreements (NDAs). It also is likely they have heard similar ideas. And NDAs sometimes signal to investors that a company's idea is not defensible enough to market to a lot of people without someone easily copying it. So instead of fussing with an NDA, I'd recommend concentrating on writing your executive summary, which you can share with investors before divulging your entire business plan.

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Related resources at inc.com:

Guide to Building a Strong Business Plan, Section by Section
Guide to Patents
Capital Training

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