Last week, we looked at what could work well with your new start up. I guess this step was easy as you should be all excited about developing your Start up Business idea. When we first sit down and start thinking of all the potential for success, our heads start spinning and are slowly become convinced that we will soon become the millionaire next door. Unfortunately, this doesn’t happen for 99% of new entrepreneurs. Why? There are tons of reasons why your start up could go wrong. This is why it is important to account for them in your business plan!
What is Not Going To Work
If you have in your mind that everything is going to run smoothly and that everybody needs your start up; you are wrong. Most individuals will probably tell you it’s a good idea but will never do business with you. It’s weird, but that’s how it is. When it is the time to shoot the breeze, everybody is willing to help and tell you that it’s an amazing idea. However, when it comes to taking real action, this is when you will see who was sincere or not ;-).
So I guess the first thing to do in your Day #4 is to remove most of your friends and allies that *could* help you out with your start up. Unless they get paid, most people won’t do anything. At best, they will talk about it to a few friends so don’t expect miracles from your entourage.
Look for what is on the market
Another way to prevent any downfall is to look what is being offered to your future market. You have to look at your competitors and understand why people are working with them. It’s easy to think about their flaws since you are convinced that you are better than them. Instead, try to find their strengths, the reasons why they exist and people do business with them. Chances are that their strengths compensate for their flaws and that they are more important to their clients than what is missing in their business model. This is how you will be able to upgrade yours at the same time.
What if you don’t make a sale in 6 months?
Some start ups take more time, energy and patience to develop than others. What if you are part of this crowd? If you can’t generate revenues for the first 6 months, can you survive? Do you have the ability to work part time or keep your day job while you are developing your start up aside? What is your financial capacity? Do you have any investors willing to share the risk with you? These questions must be answered in this part of your start up business plan.
If it doesn’t work, what is my plan B?
I’m a big fan of having a plan B. I think that as strong as your plan A may be, your plan B is even more important. Your plan B is not about quitting your start up and going back to your old life. Your plan B should include different avenues (products/services/business structures) that you can explore and what you have learned from your Start up business.
For the very first time of your adventure, this day should be considered as a very pessimistic one. You should see everything in black and look at all the bad things that could happen. Should you be discouraged after it? If you are, it means that you are not made to build a start up business. If you are motivated by these challenges, you are on the right path ;-).
In Day #5 of your Start up Business Plan, we will look at the possible structure of your company.