Steps in starting a business [Archive]

vangogh

01-22-2009, 11:34 AM

I think the most important step is actually getting things going. It's easy to get lost in the planning and trying to perfect things without ever opening your doors for business.

When I started I did take a week to work through an informal business plan. I found it very helpful to put down my ideas on paper (or in a text file). It helped me see a few things I had neglected to consider and refine some ideas I had. It also helped me be more consistent with all my ideas.

Picking a name was difficult for me, mostly because every time I came up with one the domain was already registered.

What I think is actually the most important thing for any business is marketing. Marketing is what's going to lead to new clients and customers. Ideally you want to bake your marketing directly into your product or service. You can't successfully tack on marketing at the end.

You have to think early on if there's a market for your product or service or if your offering will be able to create a new one. You have to consider what your market wants and needs and what will convince them to buy from you instead of your competition. What's going to differentiate you from others and give people a reason to buy.

I also think that marketing will help lead you in building a brand and you should be thinking of your brand and how you'll establish it from the moment you start. You want to be as consistent as you can with your brand message and all the actions you take on behalf of your business.

Much of the rest is the details of the above.

Dan Furman

01-22-2009, 06:49 PM

1) Idea
2) Write it out (not a business plan, but write it out). One evening max.
3) If needed (local service, etc), get biz cards for credibility. Skip otherwise.
4) If needed (product), obtain/make product. Skip otherwise.
5) Make a sale. Some how, some way, make a sale. Knock on doors and sell your service. Go to the flea market and sell your product. Open an ebay store and sell your product... whatever. Make a sale.

Go from there.

Steve B

01-22-2009, 07:43 PM

It's kind of a trick question. If you do a business plan - the business plan will include a few dozen "steps".

I would do a quick and dirty business plan first (but address each element of the typical outlines). Then gather objective feedback from a number of different sources (friends, relatives, anyone you trust). Then, ignore their opinions and meet with a lawyer, an accountant, and maybe your insurance broker and get started. You will want to do a more extensive business plan before you sink too much money into it.

seolman

01-22-2009, 11:54 PM

A good business plan really answers all the 5 questions but one of the main areas to address would be deciding where to position yourself in the market. One of the best books I ever read about marketing was "The Discipline of Market Leaders". It basically broke everything down to 3 choices:

Best Product (like Intel - spend lots to always stay ahead of everyone)
Lowest Price (Walmart - don't promise anything but the lowest price)
Customer Intimate (IBM - we solve all your problems)

You can't mix the message. If someone tells you "Our product is the best, it's the cheapest, and it will solve all your problems" they will be bankrupt soon. It's impossible to sustain a mixed model. You can't mix any two or three of these. Choose one of these directions and stick with it - if you mix any two you will go broke. It is extremely difficult to fit into one of these and stay there but the system works.

huggytree

01-23-2009, 01:30 PM

1. be an expert in what your planning on doing...i dont know how many posts ive read where the people dont have a clue about the business their getting into...i remember one who wanted to open up a wine store because he likes to drink wine...my advice was to actually work at a wine store for a few years and learn off someone else.

2.come up with an original idea (be different)

3.Save money. have enough to buy alot of the equipment. have enough in reserve to live for 6 months to a year while your business is ramping up...you wont make a full wage on your first week...maybe not for years!

4. look like youve been in business for 10 years on day 1. get a logo and put it on everything you touch...no home made business cards

5. time to start..register your llc, get insurance, buy equipment, figure out your prices

6. get customers....how will you? it needs to be planned in detail...money needs to be set aside...dont be cheap.

huggytree

01-23-2009, 01:32 PM

i pick 'solve your problem' as the smart choice...best value & problem solver is where the largest amount of good customers are....lowest price = death sentence for most businesses. i find the cheapest customers also expect the most and will always think they over paid, so give fewer referrals.

Dan Furman

01-23-2009, 06:01 PM

I have to disagree with some of what I'm reading. For most small businesses - at the very beginning - sitting there trying to position yourself in the market and trying to come up with a unique selling angle essentially means you are never going to leave the kitchen table. Remember, we're talking about starting.

Push all the papers to the side. Push all the wrangling over "the market" aside too. Don't quit your job, and don't invest thousands.

Make a sale instead. Then start worrying about the market.

I can't say this enough.

Make a sale.
Make a sale.
Make a sale.

It is more important than anything.

huggytree

01-23-2009, 07:18 PM

I stand by my 6 things, but i will add a 7th!...

7. start part time if possible

very important!!!

starting without knowing what your doing = 90% failure

without a unique idea i would not start a business...why would you if you have nothing different to offer? (when i started i had no unique idea, but i wanted one...i tried and tried and couldnt think of one....my business took off when i discovered the way i did things was unique and all i needed to do was express them to the customer)

without a unique idea why would anyone choose you over who they currently use?..the unique idea usually becomes low price...which is not a unique idea...its a losing idea.

i take a very conservative approach to business.....i believe in minimizing all risks....the part time thing may be the most important thing....i dont know how i forgot that one..

Dan Furman

01-23-2009, 07:41 PM

without a unique idea i would not start a business...

Yet, you did.

when i started i had no unique idea

exactly my point.

I didn't have a unique idea either. And we're both doing fine, Dave. I would not recommend anyone start any other way than I (we) did - get excited, maybe jot down a page of ideas, and then go do something with it. Excessive planning is for dreamers. There's plenty of time for planning once you get your feet wet. Heck, I'm still planning and testing the market.

Let's not forget where we came from. Much of the accumulated wisdom we now have is usually a deterrent to someone just getting moving. Baby steps. That's why in my home based business book, I recommend NOT doing a business plan. No way to really prove it, but I will bet anything a larger percentage of successful businesses started with a sale rather than a formal, detailed plan.

Even huge businesses who now have unique selling propositions likely started in a garage somewhere. And a sale likely came before the detailed business plan and focus on the market.

huggytree

01-23-2009, 07:56 PM

i did it, but i wouldnt recommend it....i was a dreamer.....i was very lucky that i was part time for 9 months and this great website corrected all my WRONG idea's....

without the part time and this website...id be gone...100% sure..

i needed time to get it right....thats where the part time helps...dont leave your day job until you get it right....i was fired for my part time job...so i was forced into full time...i was lucky that i was 99% ready at that point...

i planned for 5 years (on some level)
i thought of names for 2-3 years
i saved money for 5 years (paid cash for everything but the van & had 6 mo. in reserve)

the reality is probably somewhere inbetween both our idea's....i do get your point...

most businesses fail...why?....too much planning...i dont think so....

i think they fail because of

1. no cash reserve
2. no plan
3. great new idea- ill be the lowest price and i will get all the business

The one thing we agree on and is the most important is -startout PART TIME!

vangogh

01-23-2009, 08:14 PM

seolman

01-23-2009, 08:54 PM

I agree with VG on this. You don't have to write up a huge plan (in fact I think big formal plans are a waste of time) but the very least you should do is some sort of marketing plan and a budget as a minimum.

Most businesses fail because they have a great idea, enough to get started but they never budget enough in their plan for marketing. A century ago they used to say "build a better mouse trap and the world will beat a path to your door" but the real saying should be: "Tell the world about your better mouse trap and they'll beat a path to your door". Don't assume just because you have a great product or service you will sell a lot - nobody knows you exist until you advertise or build reputation by word of mouth.

vangogh

01-23-2009, 09:18 PM

For me writing an informal plan really helped me refine my ideas. I had plenty of thoughts about starting a business, but by writing them down it helped me see things I hadn't considered and also see where my ideas might be somewhat inconsistent with each other.

And while I did use a typical sample plan as a template I hardly followed it. But a few sections did get me to see what services I should and shouldn't offer and helped me define what I wanted my brand to be.

But again you shouldn't be spending months working on your plan. The most important thing you can do to get started on your business is actually get started on your business. Until you start taking action you don't have a business and you can plan all you want, but you're going still going to be improvising all the time and making changes from what you originally thought.

Write some thoughts down one night or over a few nights to give yourself a direction and then start taking the actions you need to get your business running.

Dan Furman

01-23-2009, 10:50 PM

Dan even though you say not to write a business plan and I've often recommended one I think we're actually saying the same thing. The business plan I'm talking about is highly informal. I did follow a typical sample plan, but I only filled out the sections I wanted to fill out. And I did spend more than one day on it. I spent a few evenings over the course of a week.

Yea, I agree. I probably should not have said "one evening max" (I tend to get carried away sometimes), but I do think people should spend a minimum amount of time on it, and more time on getting those first few sales nailed down. But yes, a few days to put something on paper won't kill you.

I'm basically saying the sale is what is going to lead to the other things (the USP's, the detailed market research, etc.)

I mean, we're likely not talking about inventors, etc here (people who are going to create new industries, etc). We're probably more talking about the laid off person starting a carpentry business, a pet sitting business, a web design business, a graphic design business, etc. I'm saying these people do not need to find some USP and endlessly study the market right away. The beginning carpenter would be better served by just going out and doing an addition, and building from there.

It all starts with a sale anyway. Yes, seolman, you do have to tell the world about the mousetrap (I do agree with you there.) But you first have to build the darn thing, and you probably should start selling a few at the local flea market before you worry about the world. :)

vangogh

01-23-2009, 11:00 PM

See I knew we agreed. The full out business plan is when you're seeking a loan or looking for investors, but for most small businesses the important thing is putting your thoughts done on paper if just to get them out of your head so you can start the actual work.

orion_joel

01-24-2009, 08:42 AM

Ok wow some great stuff here. I was going to say more then i expected, but this forum so often over delivers on my expectations.

Now to explain a little more. What i want to do with the information is put it all together and create a sort of guide to starting a business. Which i know is not a unique idea it is actually probably a over done idea. However i am planning to do it specifically focused locally. My initial thoughts had been to do it as a 30 days to start a business or something with a different part of learning about or doing something to getting the business started however, at this point i am unsure about the actual length.

It seems that i need to try and distill it down to as few steps as possible though while conveying everything that needs to be done. But most important it seems is getting action happening and making a sale as early in the process as possible. I think i have some thinking to do. Also in light of what i am planning is there any thing different you would suggest?

Steve B

01-24-2009, 09:44 AM

I don't agree with the notion of getting the first sale without a thorough planning process. It's incredible how many people start businesses and haven't thought through the details. And, I'm talking about some pretty basic details. (for instance a landscaper that didn't plan on how he/she is going to survive the winter when there is no money coming in!!) I've seen a lot of people lose a lot of money because they didn't have a good plan (either formal or informal).

Getting the first sale is extremely important after you have concluded with objective review that you have a good enough plan to carry you through your first few years. I can certainly agree that many will have a tendency to over analyze and be too afraid to take the risk of doing it until it's too late. But, one, or two, or three days of informal planning is likely not going to be enough analysis to take the associated risks with most businesses.

There is a reason banks and other professional lenders want to see all the analysis contained in business plan. Even if you don't require a loan, I would think you and your family deserve the same level of careful review before putting your assets and/or business and personal reputation on the line.

Spider

01-24-2009, 10:58 AM

I do like the idea of making a sale first, if that is possible. But that's not always possible, I started a plumbing business, just like HT, but I was aiming at large installations and I could not be hired by large contractors or accepted by engineers unless I was an actual company.

Certainly the business plan is necessary. I started with an informal one - write down your idea - but that had to expand to a full, formal business plan before a company could be formed, accounts set up, legal documents signed, etc. All of which was necessary before I could bid for my first project.

As to not spending months on the business plan, I think is not good advice. I say, spend as much time on your dreams, ideas, plans, as you need. Rehearse an actual working day in your mind, many times. Practice mentally the effect, the accomplishments, the environment, your business will create. Imagine repeatedly what your business will mean to yourself, your family, your employees, your customers.

I read about a prisoner who spent his entire 20-year sentence reading about and thinking about golf. He read lessons on golf and practiced in his mind how to play the game. The first time he held a golf club was the day he left prison and immediately played a very decent round. You can do this for a new business and be very prepared and "experienced" with the right thought processes.

By far the best idea proposed above as the 'first thing' is to work as an employee in the industry you wish to enter as a business. Many new businesses are, indeed, employees starting their own business in their industry, but some do try to start a business in an industry they do not know, and that is risky, I think. It's easy enough to get a job in the industry and much can be learned in a few months. During which time one can dream and plan and imagine and mentally rehearse.

vangogh

01-24-2009, 11:52 AM

How much planning you do depends on the individual and the business. Sure, some businesses will need better planning, because they need capital to start or the business is going to be a larger entity. When there's more risk involved in start up it probably makes more sense to plan a little.

Some individuals likely need to think things through more than others too.

The danger of putting too much into planning is that planning is not the same as doing. If you spend months planning that's months you're not actually working and starting a business. Much of what you would put into a plan you really don't know. You're guessing to a degree at things like projected sales. It's too easy to get lost in the plan spending your time trying to perfect it while never starting the business.

I think everyone should take some time to think about what it is they're looking to do. You shouldn't just jump into starting without having some idea what you're getting yourself into. But so much of business, especially a first business, is improvisation. You have to do, experience, learn, and adapt. You ultimately need to be in business to be in business. That's not to say you can't continue to work on your plan while your front door is open to customers. In fact most books I've read about business plans suggest starting the business while writing the plan.

Whether you call it a business plan or just some thoughts on paper or whatever, I do think it's important to spend some time thinking and planning. But it's even more important to be doing. You're not in business when you're writing a plan and while you shouldn't just jump into things blindly you do need to jump in at some point.

Dan Furman

01-24-2009, 03:28 PM

I don't agree with the notion of getting the first sale without a thorough planning process. It's incredible how many people start businesses and haven't thought through the details.

It would be interesting to find stats here, but I know from personal experience (both myself and talking to other biz owners), almost every success story I know started prettymuch by the seat of their pants. Planning was minimal. Now, I'm not talking about financed businesses or the like - I'm talking about a guy (or girl) saying "I want to do x" and eventually succeeding.

I recall going to SCORE years ago and asking about biz - three retired entrepreneurs all wanted to see my biz plan. I didn't have one, but I still talked to all three...

In the conversation, I asked about they started. One guy started by unloading trucks, eventually rented some space, rented (and then bought) a truck, etc... ended up w/ a small fleet and warehouse operation. Millionaire.

The second started as a grocery clerk, eventually moved to night manager, rented a small stand at a local market on a whim and started selling fruit... In the end, had a nice little local grocery chain (3 stores... I forget the name). Millionaire.

The third started shooting weddings and such for friends. Eventually went from weekend work to full time photography - eventually had 4 guys working in his shop. Millionaire.

The common thread? No formal plan. In fact, if I recall correctly (this is going back 20 years), neither had any type of written plan at all at the start - they all started with hard work, bootstraps, and making a sale. Yes, they eventually all got plans and such when they finally went to a bank to buy another store, another truck, got into advertising, etc.

But yet, here they were, counseling young Dan on starting a business, and wanting to see a detailed business plan. Why? Here I was, with dreams, gusto, and a desire to get out there and get going, and these guys were saying "whoa there young buck... do some major homework first. Where's your market analysis?". I have to tell you, it was almost soul crushing.

I didn't get it then, and I don't get it now. Yes, these three men had wise advice to offer. They could show me things I couldn't see. I understand that. But they also forgot where they came from. Flat-out forgot.

I'm generally against the "detailed planning" thing because it fosters a tentative attitude. Please keep in mind, however, that I am NOT advocating blindly jumping in either (I did write a pretty hefty book on this stuff - second edition coming out within a month! :) ) Of course a landscaper has to think about December (plow anyone?). I would never advise anyone to ignore that. And Spider, your situation called for more initial setup - totally understandable.

But before mowing that first lawn, does a landscaper really have to do a detailed market analysis or figure out some USP? Or come up with the perfect logo? No, he or she doesn't. Go mow the lawn, get paid, try and get a second / third / fourth lawn, put a deposit on that winter plow, and spend every third Friday working on the business, not in it. Work on your ongoing plan then. You're rolling.

In the end, I feel the default "business plan" (or over planning... whatever we want to call it) takes a back seat to sales in most cases. There will always be exceptions (Spider pointed out a good one), but Dan's advice will almost always be "make a sale and go from there." Because that's how most successes started (most failures, too - but then again, some kind of failure is usually a part of the success equation as well.)

huggytree

01-26-2009, 06:23 PM

you can fly by the seat of your pants...but why?

you dont need a perfect logo on day #1, but why not?

you dont need a business plan...but why not?

you can do it with no money in reserve...but why? what will you do if it takes a year to get 40 hours of work?

(i didnt have a written business plan, but i had alot in my head,just not on paper)

why wouldnt you want every advantage?.....i would....i wish i had uniforms and a better tag line when i started....i would have done better if i had a better website...

does not being prepared mean you will fail...no....does it mean you will lose sales...yes... when you start you need every sale possible...you need to know and understand all costs..

i think most people start out trying to be cheaper than the other guy(i did)...this is just a failed idea.......if i would have been more prepared i would have thought this all through...i spent 6 months hard core preparing and 6 years mildly thinking about it...it wasnt enough!

cant anyone get a sale....if your cheap enough you'll always find someone who wants your product.

i think almost no one plans for their business....90% failure rate proves it

jumping in and getting a sale without planning leads to 10% chance of making it.

i think most people follow that advice and do just that...get a sale...

seolman

01-26-2009, 11:07 PM

Dan - even though all those guys you mention made loads of money, you can bet they made a lot of heart breaking mistakes along the way and lost a lot of money too. That's probably why they were encouraging you to plan your business better than they did - probably so you would make your money faster.

I'm almost 50 and the first couple times I started businesses I did fairly well - didn't have a formal business plan but man I made some stupid mistakes. Things turned out OK and I sold the businesses at a profit. Would have been cheaper to go to Harvard. I make less mistakes now but I can guarantee you I always encourage new business owners to sit down and write up at least a basic marketing plan and do a break-even analysis - just to help them make the learning process less painful. No it's not always necessary to do a big business plan - but some basic planning may save you a lot of heartache.

nealrm

01-26-2009, 11:11 PM

Hey Dan,
Do you think if you talked to 3 failed retired entrepreneurs, that they would have all had business plans?? Probability not. Since many businesses start without a plan, the chance of finding 3 who were successful at random would not be unlikely.

I always compared a business plan to a road map. It is possible to drive from New York to LA without a map. Many have done it. Yet the route is easier and more direct with the map. But don't expect the map to tell you about the detours, pitfalls and obstacles in your way.

As for what is important in starting your business. That is understanding your cash flow. Businesses with positive cash flows stay in business, those that don't - close. Your business plan needs to address how you will go from a negative cash flow (starting the business) to a positive cash flow before you run out of cash.

Spider

01-26-2009, 11:25 PM

Reading over these posts again made me think of this --

Have any of you been to a MLM recruiting meeting? Especially, have you been to a MLM recruiting meeting since you started and reached a level of success in your business?

Wouldn't you agree that most of the people in the room don't have a hope of ever becoming successful in their own business at that time in their lives. It's not the MLM business format that delivers such a poor result, it is the people who are recruited just don't have a clue about running their own business. This is so obvious to anyone who has a successful business.

Those recruits are trying to start a business - "Just go out and make a sale" - "Make a list of all the people you could sell to." - without a business plan. Without even a rudimentary plan in their mind of what it is going to take to be successful in business.

"Just go out and make a sale, then make another one and another..." in the hands of someone who knows what business is about, may work. But anyone who knows what business is about isn't going to do it that way, anyway. In the hands of someone who doesn't know what business is about is what give MLM such a bad name - and any other business model that encourages starting without preparation.

Dan Furman

01-27-2009, 01:55 AM

but some basic planning may save you a lot of heartache.

Have not disagreed with this once. Not saying go out there blind. I AM saying, in general, go make a sale before you worry about the perfect logo on everything and a detailed USP, etc.

Dan Furman

01-27-2009, 02:27 AM

Without even a rudimentary plan in their mind of what it is going to take to be successful in business.

and any other business model that encourages starting without preparation.

Maybe you don't mean it this way, but I find the above a little insulting (maybe it's the MLM thing - I'd hate to think my posts reminded you of scammy MLM). But really, is that honestly what you gleaned from reading my posts?

Dan Furman

01-27-2009, 02:39 AM

i wish i had uniforms and a better tag line when i started....i would have done better if i had a better website...

See, here's the thing - sometimes, it's better you learn this the hard way. You become a better business person.

I mean, Huggy, we told you 100x about the website, and you said over and over "websites don't work for plumbers". And you went on and on about price, price, price. Remember?

I would absolutely recommend to a starting plumber that he or she go do some plumbing before they worry about a killer website and/or tagline.

That doesn't mean jump into everything blind, however.

billbenson

01-27-2009, 06:22 AM

Since everyone is attacking Dan here, I'm going to take his side. One sure way to know if your idea can work is to make a sale. That doesn't mean quit your job.But if you can't make one sale, you can't make 100 sales.

I would view a plan for most as a list of daily, weekly , monthly, yearly objectives. Most employers ask for at least monthly objectives.

phanio

01-27-2009, 10:17 AM

1) First things first – Mind Set. You have to be mentally strong. Know that you will put in long hours, that things will not go your way all the time and that whatever comes up, you will persevere and overcome. Plus, have passion for what you want to do. Set you mind not to fail. I rather see someone with determination then a full out business plan. (I am not saying not to plan – I do say plan until the point that it is time to execute. – for some that may mean one day – for others it may mean months. – just don’t let planning stop you from executing).

You don’t have to have a unique idea. You just have to fill a need. Even if it is the same old idea that you can do better. Think Google.

I like the concept of being an expert. If your customers have doubts (even if you have your own doubts) they will never buy from you.

2) Know your market. Know your customers. Know how they buy and why they buy. Know where they get their information to buy.

3) Feasibility – this could mean (as stated) working part-time and getting that first sale or just simply getting out and talking with potential customers (easy to do on the web these days). This will teach you more about what your business should be than any formal business plan (e.g. sitting in the kitchen thinking about what you want and not what your customers’ want). This way, even if you don’t make a sale at first, you know others will buy it because it is designed for them – to meet their needs.

4) Financial. As stated, have your own personal ducks in a row for a while. Thus, you can really focus on the business instead of focusing on what the business is providing you. Also, make sure that whatever it is you provide, that it is cost effective to do so. I have seen many businesses fail as their costs are larger than their revenues. One company I worked with was just elated when they received a contract for services for $20K per month. But, after six months, the company was struggling to meet payroll. Once we sat down and itemized costs (matched them against the actually revenue they generated), we found out that to earn the $20K (to provide the service) it was costing them $30K.

5) Work hard and learn – no excuses – the execute, execute, and execute.

Dan Furman

01-27-2009, 10:50 AM

vangogh

01-27-2009, 10:58 AM

Just to offer some defense to Dan about the business plans. I'm not sure why some are thinking he's suggesting not to write one. Dan's point with the business plans is not to obsess over them and try to create the perfect plan before getting started on the business.

Sure create a plan. Put your thoughts down in order to make them more cohesive, but don't worry about making things perfect before you get started. You're never going to have a perfect business. It ain't gonna happen so don't wait until you've perfected minor details before getting out there and making a sale.

Spider

01-27-2009, 01:00 PM

Maybe you don't mean it this way, but I find the above a little insulting (maybe it's the MLM thing - I'd hate to think my posts reminded you of scammy MLM). But really, is that honestly what you gleaned from reading my posts?Dan, the first line of my post to which you refer says
Reading over these posts again made me think of this --

All the posts in this thread, not just yours.

Also, I clearly did not refer to any particular MLM program - I referred to the MLM business format. There is nothing *scammy* about the business format. MLM is highly regulated and demands far more legal compliance than almost any other business format. I was referring - again, I think, quite clearly - to people (recruits) who start a business without a plan in mind.

If I can adjust your hypothesis to -- Know the business environment in which you intent to operate, think about how you are going to operate, write out some description of how you are going to operate even if it not a full, formal business plan... then - before you spend time on letterheads and website and logo design and the colorscheme of the office draperies - go make a sale. Then another. And after you have made a few sales, revise your business outline into a better plan, get a logo designed and print some quality businesscards, letterheads, invoices and a website.

If you were really saying something like that, Dan, I would be 100% with you.

nealrm

01-27-2009, 01:13 PM

I think we are all saying the same general idea. The only difference is scope.

Remember, to succeed in business all you need to do is work half days seven days each week. The great thing is that is doesn't matter which 12 hours you work. :D

Dan Furman

01-27-2009, 01:50 PM

All the posts in this thread, not just yours.

well, since I was prettymuch the only guy saying "make a sale", it's not unreasonable to attribute your post (which was very critical of that mindset) as a response. I mean, you are essentially saying my advice/attitude (since I was the only one saying such) remind you of MLM people starting with "no rudimentary plan" (which, I don't understand how you connected those dots - the way you word your post essentially attributes that mindset to me. That's how I read it.)

I took it as insulting. Maybe I'm wrong, but I did. I'll get over it.

Steve B

01-27-2009, 02:00 PM

It's all a matter of degree. I think we all agree that you can't have everything perfect before you get started and there will definitely be changes along the way despite the best planning and research. I like the map example used above.

Below is the quote that shows the big difference in my approach and Dan's.

"2) Write it out (not a business plan, but write it out). One evening max."

Even if you had one of the finest business minds in the country and you were starting the most simple kind of business (house painting or a lemonade stand) I would suggest a "cooling off" period before ordering business cards, buying supplies, then making a sale. I would wait at least a week or two, gather input from friends, gather input from people you don't know and can be objective, then if you still want to move forward - then go make a sale. That's obviously an extreme example - which would still require a couple of weeks of planning not a single day. Since most businesses are more complicated and most people didn't get their MBA from Harvard - appropriate planning will be much more time consuming.

This is just my opinion, I'm aware of the anectdotal stories of people who have had considerable success with a lot less planning.

Dan Furman

01-27-2009, 02:38 PM

Below is the quote that shows the big difference in my approach and Dan's.

"2) Write it out (not a business plan, but write it out). One evening max."

well, I since amended that (a few posts later) - yea, one evening max is probably extreme :)

I'll tell a quick story here...

Had a friend who wanted to sell a product she was going to make, and wanted two companies for this - one a corporation for the main biz, one a non-profit, and the corporation would donate to the non-profit etc etc etc. She wanted to know how to set this all up, how to approach other companies about helping the non profit, how to structure everything, how to position herself in the market, how to get packaging, where to find warehousing, etc etc. This is all before she even made one and sold it.

My advice? Go make some money before worrying about how to divvy it up and all the other stuff. Sell a few on EBay or rent a table at the next bike event (the product was for Harley Davidson fans) so she can get an idea if people even want it. Plus, making a few and selling them will start to give a clearer picture of the supply chain logistics (because she had some odd supplies.)

To be honest, the advice was partially meant as a "weed out" tactic. See, my friend was a dreamer - the idea of being in business and seeing her product on store shelves was the business. There's a million people like that out there. Lots of dreams, lots of plans... I'm telling them to go out and DO. No, I'm not saying go out and invest a ton of $$$ or quit your job without a plan, but almost any business can be tested to see if you even want to do what it is... a plumber can start on the weekends, a product can be sold on EBay or the flea market, a web designer can start part time, etc etc. You can do all of this stuff before you invest the time in extensive market analysis, logo design / etc etc.

End result with my friend - Once she had to make a few and sell them... well, that stopped things cold.

seolman

01-27-2009, 04:13 PM

I guess what you're saying Dan is: there are doers and talkers. Better to be a doer ;) I agree. Most successful people have a "never say die" attitude. If you have that, you have the most important thing in any business plan.

Dan Furman

01-27-2009, 06:09 PM

vangogh

01-27-2009, 07:00 PM

And another amen from the congregation.

I do think it's a good idea to spend some time planning. I think it's important to have a sense of what your business will be, if you offer services you should think about what those services will be. You should have some idea of how you'll market your products, etc.

But notice I say 'some idea' a lot. For most of us we're not going to know how things will turn out. We're not going to be able to plan out every detail, because we really won't have all the information.

Look at what's going on with companies like Google. They release a product as a beta. It's technically not a finished product. They see how many people use it, listen to feedback, and improve the product based on the feedback. Product development becomes more of an iterative process where you release something for consumption knowing it's not perfect and then improve it with the help of your customers.

Why can't your business operate under the same conditions? Get started, put it out there, and consistently improve it based on results.