Updated: Sep 28, 2018
Starting a new business is a lot like falling in love.
What’s not to love about being your own boss?
Because, as the old saying goes, “Love is blind,” not only in new relationships, but also in new businesses. How do you mitigate that “blindness,” idealistic distortion, and naiveté that we all experience in the early stages of entrepreneurship? By crafting a well-thought-out strategic business plan (SBP). We often have mostly fail-proof fantasies of success in our heads until we actually do the serious structured thinking required by a SBP and specifically, the SWOT analysis part of that plan. (If you are unfamiliar with SWOT, it stands for Strengths, Weaknesses, Opportunities, and Threats.)
For those who are “incurable romantics,” a SBP that includes an exit strategy and a hard look at weaknesses, threats, and a market analysis is as unnecessary and undesirable as a prenuptial agreement. Also, looking at strengths and opportunities often stops at the edge of our dreams, and we fail to see what else we have going for us. So, if you can get past the seduction of this romance and want a love that lasts, what’s next?
Clearly, you cannot see what you don’t know to look for, so someone to guide you is a good starting point. That might begin with organizing your thoughts around the elements of a SBP so you can have some ideas to take to a “guide.” Guides can be from a variety of sources: Small Business Administration, lenders, business students in MBA programs, private consultants, attorneys, CPAs, among others, and your industry-related technology experts.
Here are some of the questions to start with:
1. What are my Mission, Vision, and Values?
2. With whom am I doing this? (Board of Directors, Board of Reference, co-owners, strategic partners, lenders, shareholders, etc.)
3. What is my “Unique Selling Point?”
4. Who is my market?
5. Who is my competition, and what can I learn from them?
6. How do I capitalize my venture?
7. How much time and money will it take to stay in business until it breaks even in a “worse-case-scenario?”
8. What or who regulates my product and its manufacture, distribution, and use?
9. What are the legal needs/risks that could put me out of business?
10. How will I exit the business while preserving and protecting my invested assets?
This should give you a good start, but there is more to a good love story, so check back for future posts when we will talk about question number 1 above: “What are my Mission, Vision, and Values?”