Starting a business is both an exciting and a scary prospect, especially in a very volatile and unstable environment like this. A business must be able to steer through rough seas, uncharted waters, and the fog of uncertainty. A start-up? Doubly so. Here we provide a business plan checklist to help you start on the right foot.
Working through this business plan checklist will increase your chances of success.
Well, fret not! I’m here to help. I’ve gone there, failed, and failed again (haha … ouch!) so I can tell you the full story. We’ve made this little nifty checklist for you to use and see whether you are ready to launch that new venture.
1) Validate your idea
FOR STARTUPS, this is important! Your idea must first be checked, tested, and backed with data that proves your service or product is something that people will pay for.
As a quick and easy checklist (checklist within a checklist!), ask yourself these questions:
- Does my service or product solve a problem?
- Have people already tried my product or service?
- Do they like it?
- Are they willing to pay for it? How much?
- Have I collected a list of potential customers who signed up for the product or service?
Answering yes to these questions may at least instill some confidence that your company or business will succeed. For more ideas and information, check out this step-by-step post on how to validate a business idea.
2) Estimate your monthly expenses
Part of planning your business is to determine your monthly cost of running it. For example:
- How much will it cost to pay for licenses?
- How much have you or will you invest into the business assets?
- Will you need to hire workers or suppliers? If so, what are these costs likely to be?
The list goes on and on…
It pays (heh) to keep tabs on these things, especially if you’re going on your own as a business owner (or if you have a co-founder, the both of you). Knowing how much it will cost to operate your business monthly will allow you to find out:
- How long can your business survive without any revenue and
- How much you’ll have to earn to sustain your business from then on
The projected cost to operate your business with your current funds is typically called a burn rate. This should give you a target to focus on in your early months, preparing you for the worst (in case it does happen).
Editor’s note: Get annual cost estimates for a business website, domain and email from a GoDaddy Guide on Facebook Messenger now.
3) Write a simple operation plan
Now that you’ve validated your start-up idea and have an idea how much your business will cost, the next step in our business plan checklist is to ask yourself what your day-to-day activities will be like.
An operations plan is where you codify the daily activities that will focus, accelerate, and maintain your business.
A business operations plan stems from your start-up idea.
For example, let’s say you are in a web hosting business. Then your “strategy” can look like this:
- Set up new servers
- Gain paying customers
- Support those customers
- Acquire new servers as needed
- Maintain servers and optimize performance
Your day-to-day activities should be in support of the strategy:
- Purchase and co-locate physical servers
- Purchase / subscribe cloud services
- Build a main web portal
- Build and maintain a customer web portal
- Maintain customer support teams
- Put up new advertisements
- Have sales teams process inbound and outbound calls
These items will make up your business’ daily operations and will also help determine what kind of roles you need to hire for.
This may affect your burn rate mentioned in #2. Go back there, adjust, and balance both your burn rate and your operations plan. This should at least keep your business steady in times of rough weather.
4) Figure out how you will get paid
The most important step is often left up in the air. Never let this happen to you!
Figuring out “How will you get paid” sounds like a no-brainer in starting a business. However, many business owners tend to leave this as an afterthought, with the mentality of “If I build it, they will come.”
But that’s not how it works. Once you have your product or service, figuring out how to enable and receive payments from your happy customers is paramount.
You wouldn’t want to annoy your existing users (who are on a free tier, if you’re on beta) or potential customers with a messy way to process payments.
Making the payments experience as easy as possible improves the customer experience, making it more likely you’ll get referrals. Customer word-of-mouth is a powerful way to increase your sales.
Editor’s note: Do-it-yourself tools like GoDaddy’s Online Store take care of this part for you. Get paid online for products, services or even collect donations on your website via Square, Stripe or PayPal.
5) Do you know your customer?
The final step in our business plan checklist is to identify your likely customer through research. Knowing who your target market is, or your buyer persona, will help you anticipate their wants and needs, thereby focusing your marketing and support efforts.
You might be saying, “Hey, this should be part of #1!”
Well, yes and no.
Yes, in the sense that you should be able to pinpoint who is likely to buy the product or service you are validating.
Constantly monitoring your customers will help you keep your edge on the market. If your product or service is like everything else on the market, what differentiates you? This will be your “X” factor and will set your business apart in the sea of similar products and services.
A good example to think about is “Why do people prefer Coffee Bean and Tea Leaf (CBTL) products instead of Starbucks, where they are the same coffee and coffee shop?” A good hint is that: CBTL knows who their customers are, and they are able to cater their business service, products, design, and experience to that specific customer.
The wisdom of having a disaster plan
Yes, you’ve read that right.
Making a plan for what to do if disaster strikes is called a Disaster Recovery plan. These plans can guide you, your management, and your staff in times of duress.
At times of stress and failure, we all tend to freeze up. Having a written playbook helps in these situations.
Examples of DR events include:
- Fires (especially if the business is making firecrackers)
- A security, data, or server failure (for businesses in the Information Technology industry)
- Negative news coverage that affects sales
- An accident that incapacitates top-level management (for most companies)
A prime example is that companies do not allow its C-level employees (such as the CEO, COO, and CTO) on the same flight, as the succession plan for replacing any one of those are their fellow C-level managers. This is part of Disaster Recovery, though a more proactive rather than a reactive approach.
Having a plan to recover your business is essential for you to survive. Making it and attaching it to your business plan is essential and should give you and your senior management peace of mind.
Your 5-step business plan checklist
IN SUMMARY, before you actually sit down to your business plan you should answer questions about:
- Is my business idea unique, and will people pay for it?
- Do I know how much it will cost to run my business?
- How will the work product be created and delivered?
- Who is my target customer?
Finding the answers to these questions will take time but it should make your business plan more solid and reliable. A detailed business plan can give your team and employees a better idea of what they should focus their efforts on, allowing them to make a more concerted and successful effort.
Hope this has helped you! Good luck, and happy hunting!
Editor’s note: Got questions about putting your idea online? Get instant answers on GoDaddy Asia Facebook Messenger now.