Business Plans: 10 Key Questions to Address
A business plan is both a technical blueprint and a military strategy for an entrepreneur. By definition a business plan is a written document describing the nature of a business, from sales to strategy. You will use this plan to:
- Raise money
- Get partners
- Get interest in your idea
So what should your business plan entail? There are 10 key questions your plan must answer for it to be effective:
What is the product or service?
If you can’t explain your business concept in 30 seconds or less, such that a 5th grader could easily understand it, it’s too complicated.
What is your product’s unique value proposition?
What makes your product different and/or better than others that are similar? What is your competitive edge?
What’s the market opportunity?
How many total dollars are spent in your market? How fast is this market growing? Who’s the competition?
How do you plan to make money?
- One-off sales
- Ad supported
What is the strategy or vision?
What are your three, six, nine and twelve month goals? What are the milestones you want to hit for each timeframe and what are the key metrics you will utilize to measure your progress?
How do you sell your product?
Just making a product or delivering a service is not enough to attract customers. How will you connect your product/service with an audience?
How much capital do you need?
Lifestyle businesses require you generate enough capital to live comfortably, while liquidity businesses are designed to raise enough capital in order to sell the business to a buyer.
Who is the management team?
Who is your team and more importantly, why is your background and skillset uniquely qualified to start this business?
What are the projected financials?
How much revenue are you projecting to generate within three years? Any projection beyond this timeframe is generally speculative and not accurate.
What’s the preliminary valuation of your company?
What percentage of your business are you willing to surrender in order to raise the capital needed to launch it? Keep in mind that the market “valuation” of your new business/idea is simply what people are willing to pay for it.
If your business plan can adequately answer the above questions, then you are well on your way to making your startup dream a reality.
For more info on starting a business, check out this free course on How to Start a Business: The Complete Guide.