The thought of writing a business plan may seem incredibly daunting, but it can do two things. First, it confirms that you want to spend time on your passion project. Second, it proves (or disproves) that an idea is worth pursuing.
This is more than a writing exercise. It's the time to understand whether your business idea is viable. To get started, you must:
- Research the market. Is there a big opportunity here? Are consumers or businesses spending money in this arena? This involves consuming everything you can get your hands on (articles, podcasts, books). Then, start with a simple Google search to find key numbers. You'd be surprised how many industry reports (from reputable analyst firms) are available to peruse.
- Look for competitors. Who is already doing this, and are they succeeding? What could you do better? What will your secret sauce be?
- Propose a business model. How will you build your idea into something that can succeed? It's time to crunch the numbers and formulate some potential strategies. This process will vary dramatically, based on your business idea. For example, let's say you want to build a company around a retail product. You'll need to think about everything from production and shipping, to whether you'd like to sell director-to-consumer, wholesale or via your own brick-and-mortar location. This is an important area in which to utilize your resources, so speak with others in the space to get the download on their business model.
Even if this is an idea you can fund yourself, go through the rigor of putting together a business plan that you would be proud to show a potential investor.