Before you start a business you should know what you think you want to sell, conduct a feasibility study, then determine your business structure, and finally build your business plan.
When something happens in your business that was not included in your study or business plan, you will need to review and update accordingly. This can be a negative or a substantial postitive event. For example: Covid-19, inflation, resession, or any other event.
Feasibility Study or Feasibility Report
For a new business, the purpose of the feasibility study is to determine if your idea is practical. You should define the scope of your business idea and any known resources that you bring to the table.
Is there really a market for your idea?
Which companies are the giants in this space?
How specific should your niche be?
Who would be your major competitors?
What weaknesses do your competitors show?
Can you make a lot of money from your niche along side those competitors?
What makes your business unique?
Can you get suppliers readily? Are they domestic or international?
Do you need licensing? Are there trade limitations, unions, tariffs, or other restrictions to your endeavor?
Can you do this project alone or will you need help?
What will your online presence be about?
Do you need a physical store or office?
You will set up your primary and major goals or objectives which will get expanded in your business plan.
Structure
There is one element of your study that is important and that is the business organization. Will you be a sole proprietor, partnership, Corporation, what? This is where your attorney will be a major help for you. And, your decisions here will also impact the kinds of insurance you will need and the level of your financial records. Take a look at our discussion called Silent Partners.
Business plan
Here you lay out what you are going to do, when you are going to do it, implement steps needed in an orderly manner, targets or waypoints that will let you know that you are on track, and more.
If you are planning to get outside funding for your business you will need to incorporate your proforma profit/loss statements and balance sheets.
This is your roadmap. Over time, you should review this document to make sure that your goals are still the same and that you are on track.
Any major hurtles that you encounter will impact your plan. It might even impact your feasibility study. Things that happen in your industry will add or take away advantages that you've been using. Other things way out of your control can impact your business like government intervention or COVID.
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