A realistic plan is essential, but make sure you take the following five steps before drafting your business plan.
1. Determine your purpose.
Having a plan to make a profit is important, but it’s not the only thing that matters when you start a business.
2. Build your vision.
It’s very important to have a clear vision of what you want to accomplish as a company. Sometimes, less is more. It’s far better to do three things very well versus 10 things moderately well.
3. Clarify your business model.
A good financial model includes many of the details you put in your formal business plan – for example, hiring, pricing, sales, expenses and growth. Like a business plan, your model should be revisited and updated as the realities of your business unfold.
4. Identify your target market.
Identifying a target market can be a tricky obstacle. To narrow down your market, answer the question, “Why am I uniquely placed to solve the problem?”
5. Test your business idea.
Entrepreneurs should talk to industry experts, potential customers in their target market and other entrepreneurs to determine their business’s viability.