This simple business plan captures decades of experience. Personally I’ve spent a full time week writing it to make sure it’s stays to the point and ask the tough questions that will make the difference between a business that works and a business that doesn’t. I’m releasing it as an open source, free document that anyone can reuse. Hopefully it can help entrepreneurs avoid 80% failure rate in the first 18 month.
At this stage, although i’ve kept it as a simple business plan, I honestly believe that if you answer each of these questions fully, the chances of building a successful business is pretty high. The reason is you have a very detailed map of each of the different steps you will need to go through at some point. You don’t have to write everything down, but you will need to have a very specific answer to each of these questions or your business will likely fail, it’s as simple as that.
You can use this plan to prepare a pitch for investors or just to understand the business problems that lie ahead of you. Personally, i’m using this exact base to power my own 7 figure business :
Your 6 steps simple business plan
1. Why are you in business ?
- Why are you personally entering this business project ?
- What are you, and each of the people involved, most proficient at ?
- Do you have enough expertise to make a real business out of this project ?
- What skills could you be missing ?
- Who could help you to bring expertise in each segment of the project (potential partners, team members) ?
- What is the capital needed for this project to succeed and where will you find this capital ?
- Why are you passionated about this project ?
- What is the commitment of each of the team members on it ?
- Why are team members a good match for this project ?
- Is the market coherent with the values and passions of the founding team ?
- Are the team members 100% focused on this project ?
- How much financial skin do you have in the game (how much of your own cash do you put into it) ?
- What is your exit strategy ?
2. What is your customer’s world and needs
2.1 Who is your customer ?
- Who will be your primary customer ?
- Will your customer buy directly or will someone else be involved in the sales process ?
- Who will benefit from your product ?
- Would you be you your own customer (and use/buy your own products) ?
- Who else could benefit from your product ?
- What industries could be interested by your product ?
2.2 Is it the right customer to have ?
- Does your target customers has money for your product ?
- Can your customer be reached easily ?
- Do they have a compelling reason to buy ?
- Do they have urgent reason to buy your product ?
- Is there a hard competition that could stop your progress ?
- What cross-sell opportunities would you have if you acquired a customer ?
- Could you scale your products to cover other needs of this customer ?
2.3 What are your customer’s needs ?
- What are your customer’s pain points ?
- What would help them the most ?
- What would be of great value to them ?
- What would save them time or money ?
- Why will your customer use your product ?
- What is the value the end user would gain fro using your product (profits, time, savings…) ?
- What substantial improvements are you bringing to the market ? Why is it a game changer ?
- Who would be your most influential customers that others would look to, for adoption of this new technology ?
- Why would the market help the adoption of your product ?
- Which partners do you need to work with to provide your solution ?
- How many potential customers existed if you were to achieve 100% of market penetration ?
2.4 What is your market’s structure ?
- What is the TAM (Total addressable market) ?
- Is the TAM over 5M/year and under 1B/year (ideally between 20M and 100M) ?
- What is the SAM ?
- What is the SOM ?
3. Your customer’s journey towards your product
3.1 Who is the end user ?
- Who is the end user ?
- Who is the decision maker to buy your product ?
- Who are the influencers on the buy (who could have veto power) ?
3.2 What are his characteristics ?
- What is your customer’s typical gender ?
- Age range ?
- Income range ?
- Geographic location ?
- What motivates them ?
- What’s their biggest fears ?
- What is your customer’s values ?
- What are his top 3 priorities ?
- What newspaper do they read or websites they visit regularly ?
- What is the main reason they would buy your product ?
- How could you establish regular contact with your typical customer ?
3.4 How will your customer discover your product ?
- How will you customer find out about your product ?
- How and where will he read more about it ?
- How and where will he tell others about it ?
- How will they understand they have a need about it ?
- How will they analyze your product ?
- How exactly will you reach your customers ?
3.5 How will they use the product ?
- How will he acquire it ?
- How will they install it ?
- How will he use it ?
- How will they receive support for it ?
- How will they analyze the value they got from it ?
- Who will pays for it, and how ?
4. Your value proposition
4.1 The main value of your product
- What value your customer will get out of your product ?
- What quantitative metrics do you have to demonstrate this value ?
- How will your product improve your customer’s life ?
- How will you convince your customer to change from status quo ?
- What complementary products or services you could offer ?
4.2 How will your typical customer drive value out of it
- How will the priorities of your customer will be met by your product ?
- How will your product fit in his career / personal journey, and how will it help ?
- How will your product meets your customer’s top 3 priorities ?
- How are your customer priorities met in comparaison with existing products ?
- What typical use case could you design to show the value the user could be getting ?
4.3. Your first prospects
- Who are your first 10 prospects ?
- How will you present them the full life cycle of your product ?
- What user case will you present them ?
- What are your product’s specifications ?
- What is their reaction to your product’s presentation ?
- How is your value proposition evolving in regard to this feedback ?
- Would your customers be ready to buy or take pre-orders ?
- What are their primary objections ?
4.4 Your product and the competition
- How does your product compares with your competitors ?
- What are it’s assets and weakness in comparaison to others ?
- How unique your products are in comparaison to the competition ?
- What is the opportunity to enter the market now ?
- How are you uniquely positioned to take advantage of this opportunity ?
4.5 Your customer’s decision process
- What needs to happen in order for your customer to give a shot at your product ?
- Who is involved in the decision to get the product ?
- Who will make the ultimate decision to buy your product ?
- Who are the influencers of this decision ?
- Who has a veto power over the purchase decision ?
- Who can advocate your product ?
- Who controls the budget ?
- Can you map the decision making process ?
4.6 Purchase process mapping
- What is the internal purchase process of your customer ?
- What budget limits do you have to keep ?
- What are the different steps the customer will have to go through for the sale to happen ?
- What is the length of the sales cycle for your product ?
- What are the difficult path you will have to go through to sell (budgetary, compliance, regulatory) ?
- What are the possible deal breakers ?
5. The business model
5.1 How do you capture the value you create ?
- What’s your business model ?
- How many revenue streams will you have ?
- What is your distribution strategy ?
- What are the main partnerships you need to help distribute the product ?
- Does the distribution channel has the right incentives ?
- How do you capture the value you create for your customers and how much ?
- What is the competition doing in that regard ?
5.2 What business model could suit the best ?
- How will you build recurring revenue ?
- Are you planing maintenance fees ?
- Will you bill hourly rates (reward activity instead of progress) ?
- Do you have a subscription for the product (annual / month-to-month) ?
- Will you have consumables ?
- Do you have a low-cost offer followed by an high margin upsell ?
- Will you promote affiliates ?
- Will the customer pay on usage of your product ?
- Do you plan to franchise ?
5.3. Your pricing framework
- How is your price established (on costs or on the value your customer is getting) ?
- What are the risks your customer is taking by incorporating your products in his infrastructure ?
- What are the alternatives your customer has to solve the problems your product is solving ?
- How much the customer would have to pay for that ?
- What is the perceived value of your product ?
5.4 Calculate the CAC (cost of acquisition of a new customer)
- How many channels will you use to acquire new customers (ads, partnerships, sales…) ?
- What is the estimated cost of acquisition of a new customer for each of these channels ?
- What are the different revenue streams (subscription, maintenance, consumables…) ?
- What are the possible upsells and additional revenue opportunities ?
- How will you keep your customer engaged to buy more products from you ?
- What is the total cost of production for each item sold (conception, materials, administrative costs, R&D…) ?
- What is the retention rate for each item sold ?
- What is the replacement rate of each product you will sell ?
- What is the yearly cost of operating your business ?
- What hidden costs can impact your analysis (customer support costs, marketing costs, …) ?
5.5 What is the lifetime value of a customer ?
- What is the 5 years value of a customer (all revenue streams included) ?
- What is your ratio of LTV / CAC ?
- have you verified that all your costs are included in each item you produce ?
6. The sales process
6.1 How is your sales process structured ?
- How does your customer becomes aware that he has a problem or an opportunity ?
- How will he learn about the solution you propose to this problem ?
- What’s the education process have you set in place to help him make informed decision about your product ?
- How will you make the sale and collect the cash ?
6.2 What is your short term sales process ?
- How will you create demand for your product ?
- How will you explain the value you created for your customer ?
- What is your direct contact strategy with your prospects ?
- How can you help kickstart word of mouth for your product ?
- What is your CAC for this short time frame ?
- How can you better profile your target customer to increase your closing ratio ?
6.3 What is your medium term sales process ?
- What is your client-retention strategy ?
- What is the average retention time frame for products of this kind ?
- What partnerships could bring you leads ?
- What will be your distribution channels ?
- Who could resell your products ?
- What percentage could you offer to these resellers (usually 15-45%)
- How can you improve your conversion rates ?
- What is your CAC for this time frame
- How can you increase the speed through your sales funnel ?
- What can you do to lower your CAC ?
6.4 Your key assumptions
- What are your key assumptions on this entire business plan ?
- What experiments have you done to test these key assumptions (like CAC, …) ?
Even if we want to keep things as simple as possible, and even we’re starting with a simple business plan, you still has to ask the right questions before you make costly decisions. I hope these questions helped you to get a clearer vision about where you hope to go !