First a business idea, then goals, now to start planning the business........right?
Step two: Planning to plan
Failing to plan is planning to fail. - Benjamin Franklin
You may have heard this before, it is cliche', however it is true. The wanting and burning desire to get the ball rolling and start doing business is almost overpowering, but it needs to be controlled. If a business is to succeed then the proper steps need to be followed.
The goals have been set according to the idea. Now it's time to take the next step before starting the business. This will be the most important step prior to starting; due diligence.
What is due diligence?
Due diligence or DD is research used to mitigate risk. Specifically it is the amount of information gathered to satisfy a requirement, typically legal but also market research. Depending on the business being considered the most common include;
Customer due diligence (CDD) which falls into the category of KYC (Knowing your Customer) would be research on the prospective clients or customers.
Vendor due diligence, or VDD, is the research and background checks done on the suppliers of goods and services to the business.
Enhanced due diligence (EDD) is exactly what it sounds like, a more in depth or enhanced research.
When starting a business the due diligence will be a bit different. Research must be performed on the business itself.
Questions to ask and Due diligence to be completed are in the above chart as well as:
The reason for finding your real focused goal first, as I outlined in part one of this series is because of these difficult questions. What if one of the questions can't be answered or is a no and something doesn't work? Then you will need to refer to your goals to make the corrections and still stay within your parameters in order to remain focused and achieve your goal(s), or possibly modify your goals.
By having the goals solidified it fosters a thought process of problem solving and allows for flexibility. Taking the first few questions listed above as an example will show how this can work very easily.
If the answer of is it viable/legal is no, then what will it take to make i t viable/legal.
If the business doesn't make sense, then what does make sense? A product change or lower expenses may be the answer.
The next set of questions can answer question two and themselves. If the business isn't fulfilling a need or solving a problem then does it make sense? The answer may be, possibly. Can the business be marketed so it appears it is fulfilling a need or solving a problem? This is not deception, but creativity by presenting a product that seems to fulfill a need or solve a problem, but are simply an alternative to something that already exists the alternative is a new product that people may "want", but don't know it yet, It's your job to deliver it.
A good guideline to use for the due diligence is a generic business plan template. A business plan template or even a sample business plan addresses most if not all of the questions necessary to complete an assessment prior to the actual plan. When the research is complete and all of the questions are answered, then all of the information gathered can be input into the template and the business plan should be more than 50% complete.
Now it's time to do the actual planning in writing.
Step two: Planning to plan
Failing to plan is planning to fail. - Benjamin Franklin
You may have heard this before, it is cliche', however it is true. The wanting and burning desire to get the ball rolling and start doing business is almost overpowering, but it needs to be controlled. If a business is to succeed then the proper steps need to be followed.
The goals have been set according to the idea. Now it's time to take the next step before starting the business. This will be the most important step prior to starting; due diligence.
What is due diligence?
Due diligence or DD is research used to mitigate risk. Specifically it is the amount of information gathered to satisfy a requirement, typically legal but also market research. Depending on the business being considered the most common include;
Customer due diligence (CDD) which falls into the category of KYC (Knowing your Customer) would be research on the prospective clients or customers.
Vendor due diligence, or VDD, is the research and background checks done on the suppliers of goods and services to the business.
Enhanced due diligence (EDD) is exactly what it sounds like, a more in depth or enhanced research.
When starting a business the due diligence will be a bit different. Research must be performed on the business itself.
Questions to ask and Due diligence to be completed are in the above chart as well as:
- Is the business viable, is it legal
- Does it make sense
- Does the business fulfill a need or solve a problem
- Can I make my business appear as if it fulfills a need or solves a problem? (marketing)
- What market will the business be servicing? (retail, wholesale, B2B, and other demographics)
- Where will the business be located
- Will the business be local, national, international, internet only
- Will it have a physical location
- Will employees be needed, when will they be needed?
- What needs to be done in order for it to be compliant
- What is the projected business revenue and the timeline for it.
- Industry value: How much revenue is generated as an industry
- How much money will be invested
- How will the money be acquired (Funding)
- Will the business be set up to run or to sell.
- What type of business will be set up (Inc. LLC. Corp. LLP, etc)
- Is there competition and/or Colleagues (what is it, how much of it is there?)
- What if the company grows, what needs to be done to ensure uninterrupted growth
- What are the risks?
The reason for finding your real focused goal first, as I outlined in part one of this series is because of these difficult questions. What if one of the questions can't be answered or is a no and something doesn't work? Then you will need to refer to your goals to make the corrections and still stay within your parameters in order to remain focused and achieve your goal(s), or possibly modify your goals.
By having the goals solidified it fosters a thought process of problem solving and allows for flexibility. Taking the first few questions listed above as an example will show how this can work very easily.
If the answer of is it viable/legal is no, then what will it take to make i t viable/legal.
If the business doesn't make sense, then what does make sense? A product change or lower expenses may be the answer.
The next set of questions can answer question two and themselves. If the business isn't fulfilling a need or solving a problem then does it make sense? The answer may be, possibly. Can the business be marketed so it appears it is fulfilling a need or solving a problem? This is not deception, but creativity by presenting a product that seems to fulfill a need or solve a problem, but are simply an alternative to something that already exists the alternative is a new product that people may "want", but don't know it yet, It's your job to deliver it.
A good guideline to use for the due diligence is a generic business plan template. A business plan template or even a sample business plan addresses most if not all of the questions necessary to complete an assessment prior to the actual plan. When the research is complete and all of the questions are answered, then all of the information gathered can be input into the template and the business plan should be more than 50% complete.
Now it's time to do the actual planning in writing.
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