Who among us has not dreamed of becoming their own boss, of being a successful entrepreneur? Maybe you have worked as a top salesperson for many years and have faith in your ability to generate and convert leads. Perhaps you work in a small business and feel certain you could run your own, even better. Maybe love people, food, music, and drink, so the restaurant or nightclub business has always called to you. Or you have invented a better widget and want to bring your idea to market under your own corporation. Whatever the reason, you find yourself, now, at a place where you intend to start a business of your own.
So you have your idea and nothing will stop you, but you need financial investment to bring your business to life. What next? At some point, most entrepreneurs feel the need to prepare a pitch deck, business plan, and financial forecast. Some do so in order to solicit investment from friends and family, banks, angel investors, or venture capitalists. Others plan to invest their own capital, but still want to prepare a written plan as a means of thinking through the venture and to map out a path to success. Either way, a business plan is an essential tool.
For most entrepreneurs, preparing these materials represents a major, time-consuming challenge. Fortunately, there are consultants who specialize in business planning. But if you hire a consultant too early in the process, you could be wasting both time and money. What steps should you take before hiring a consultant in order to get the most out of the relationship?
Here are four essential steps you should take:
1. Research: You feel in your gut that your business idea is a great one, but is there a ready market? What is your total addressable pool of customers? Where are they located? How will you reach them? Who are your direct and indirect competitors? What sets your business apart as different and special in the eyes of your customers? All crucial questions that need to be answered before you put pen to paper.
2. Check your business model: Do you have a real concept and business model, or is it an idea that needs more work? Do you have a concept drawing? A prototype? Where will it be manufactured, and what are the minimum runs and the lead times? What is the cost of each unit with shipping and packaging? Is the product viable in the marketplace after adding your markup? Some business planning consultants can help you with this process, but most cannot. Either way, these questions and much more must be answered before your plan can be finalized.
3. Leasing Property: Nearly all startups will require some type of lease to get off the ground. For manufacturers, restaurants, and retailers, this is a crucial success factor. In a real business catch-22, you will need the funding to secure the lease, but you can’t secure the lease without the funding. What do you do? Take some time before you contact a business plan consultant to look at potential properties, improvement costs, zoning, permits, and licenses involved. It could take a couple of months or more to find a property that suits you, or at least find a sample property you can use for your plan financial model.
4. Marketing: Most business planning companies cannot help with this part, and will simply put your ideas on paper. If you are working with a company like that, be prepared to have talked with a few marketing firms ahead of time to develop a coherent marketing plan for your business and understand the associated costs. Or choose a business planning company that has marketing skills and can challenge your assumptions and add value to your marketing plan.
To transform your entrepreneurial dream into reality is not an easy task. The more prepared you are for business planning, the better your plan will be; the better your plan is, the better your chances to raise the capital needed to successfully launch your venture.