In my work with new and aspiring entrepreneurs, I find that most struggle with putting together a written business plan, often pointing out that someone they know started a business without anything written down.
It's no secret that the rate of failure of new business startups may be a high as ninety percent, so we all need all the help we can get, validating the opportunity, clearly positioning against competitors, projecting financials, and planning all the necessary marketing and operating activities.
I recommend the following short list of deliverables to keep you on a winning track:
1. Create a new business overview brochure.
Starting a new business starts with selling everyone, including yourself, on the viability and specifics of your idea.
Just talking and waving your arms doesn't do it. Most people will be engaged by a single-page double-sided glossy executive summary, and offer support or the right people to move forward.
Whether you are looking for partners, investors, or future customers, you need to show a level of professionalism and leadership very early that will draw people to your idea. It can pay big dividends as this stage to get help from an experienced business advisor.
2. Two-minute video highlighting you and your idea.
Even people who read will be impressed with a video clip these days, as an introduction to you, showing your passion and commitment, and highlighting your business focus and direction.
Be sure to net out the opportunity and the solution in the first thirty seconds. Make it light, but factual.
For details and examples, check out these directions and suggestions. You really need at least a prototype product or customer to make the video come alive. Think of it as an infomercial. You don't need special lighting or equipment; keep it concise and simple.
3. PowerPoint pitch for investors and partners.
This section is especially important if you intend to attract outside investors or strategic partners.
In my experience as an angel investor, the perfect pitch length is ten slides, outlining the business problem, your solution, opportunity sizing, competition, and financial projections for the next five years.
Remember, investors or interested in acquiring a piece of your company, so keep the focus on the attractiveness of the company, rather than the product. Make sure you can cover all the material in as little as ten minutes - investors are easily bored.
4. Prepare a business plan 20-page document.
No matter how much you enjoy talking, you don't have time to reach all the people who need to know, with the right level of detail, what you can put in a document.
This document must cover all the content discussed earlier, with details to make it come alive without you talking to fill in the gaps.
If you are an entrepreneur who doesn't feel comfortable writing, there are many advisors, investment attorneys, and independent contractors who are available to help, for a fee. Review some examples to assure you have all the proper legal disclosures and content.
5. Validate your financial assumptions with a model.
I always recommend the creation of a simple Excel spreadsheet with your projections of revenue, cost, and other major financial elements over the first five years of your new business.
You will likely need this work to properly answer potential investor questions, and test your own assumptions.
The real objective here is convince both you and potential investors that the business is financially viable and lucrative over the long term.
There are plenty of guidelines and sample models available on the Internet, so don't be intimidated by the terminology.
While the completion of all of these items entails a lot of work, I assure you from experience that the results are worth it, to minimize the probability of a serious business failure and bitter disappointment on your part, and the confidence of people who believe in you.
In my years of work with new businesses, I'm more and more convinced that having the idea is the easy part - the real work, and ultimate success or failure, is in the execution.
If you want to stand out above the crowd, my advice is to focus early on all five of the business plan elements outlined here, and enjoy the fruits of your labor for many years to come.