The Essential Entrepreneur, 2nd Edition

CHAPTER 2Developing a start-up business plan

It's quite astonishing to me just how many people can't clearly articulate their business model and how and why it will be a success. Why is it a good idea? Is there a customer who will pay for your product? How have you validated that? How big is the market? Who is your competition and what's your point of difference? How many units do you have to sell, and at what price and margin, to be profitable? Who are your potential customers and how will you communicate with them? How much money do you need? These are confronting questions, but if you're going to have the best chance of success they need to be answered.

Developing a start-up business plan is absolutely fundamental to success. If you're bringing partners on board, either for their skills or financial support, you must be able to clearly articulate and demonstrate what the opportunity is and how the business will be profitable.

In chapter 11, I'll present a great business presentation format for all potential stakeholders, not just investors. Then, in chapters 12 to 17, I'll detail the important business aspects that will feed into your business plan. But first, in this chapter, we're going to look at the key information that every plan must contain.

Market validation

After talking to family and friends about your business idea, the next step is to approach potential real customers and suppliers to validate your model. This is an essential step (because chances are your ...