Before undertaking your dream business, closely examine if you are up it. Here’s a guide to help you to do just that.
A would-be entrepreneur often starts with a great idea popping in his brain. He sees the idea very clearly in his mind and feels the urgency of translating the idea into reality. Depending on his passion for the concept, he could even taste the sweet success that his idea would bring.
Then it becomes apparent that he would have to put into motion a series of actions and events that would lead to this success. He could react to this realization in two ways: amuse himself thinking that all he has are mere ideas, or make a decision to act and see his idea not just in his mind, but also in reality. The former is simply a dreamer, and the latter, an entrepreneur.
“Success seems to be connected with action. Successful people keep moving. They make mistakes, but they don’t quit,” says Conrad Hilton, founder of the Hilton Hotels chain. There’s the rub: It’s not how big or small you think your idea is but what you do with it, and how you deal with yourself as you go about turning your idea into your reality.
How do you go about turning your ideas into gold? Do you go out and tell the next person you meet on the street? Do you call your best bud over the phone? Or do you take out a pen and a piece of paper and start writing the heck out of your mind about that grand design in your head? Time’s up!
First things first: Keep in mind that your ideas will turn into dust if you don’t put them into writing. How come? For the simple reason that writing about it gives it a physical presence—letters in ink on paper. Your idea is now real because it is already taking up space.
Psychologically, this also gives you perspective. But that’s enough space we are going to give to time-space mumbo-jumbo. It’s time to tell you how to put this business idea into writing.
This exercise will give you the opportunity to focus and plan what you need to do to turn these ideas into your dream business. Having a well-written business plan will also allow you to seek and engage investors who could give you that much needed funding to jumpstart you business.
A typical business plan consists of three parts:
1. The Business—Include in this section the following information:
a. Description of the business
d. Location of business
2. Financial Data—Among others, this is what you should include in this section:
a. Sources and applications of funding
b. Capital equipment list
c. Breakeven analysis
d. Income projections
3. Supporting Documents:
a. Personal résumés
b. Personal financial requirements and statements
c. Credit reports
d. Letters of reference
e. Job descriptions
f. Letters of intent
g. Copies of leases
i. Legal documents
j. Other relevant documents
Hopefully, after going through this exercise and organized your thoughts, you would have enough knowledge and information about yourself and the business environment, which you can later use to come up with a complete business plan ready for scrutiny by investors, lenders and venture capitalists.
This article was originally published in the May 2010 issue of Entrepreneur Philippines.