So You Want To Run A Business

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Contents

Overview

When you are thinking of running a new or existing small business or startup, you need a "business plan" to help ensure you've thought through the risks, rewards, and contingencies, along with the primary activities of your business.

You will probably be in a formal or informal partnership, and each participant in your partnership should be on the same page with everything in the business plan. Work together to hash things out until each of you is on the same page.

This page presents an outline of some of the key elements to include in your business plan.

About The Business

  • Give a summary paragraph or two of your business. What does it do? Why will it matter?
  • How will it change the world?
  • Why do the partners want to be involved in this business? What is their passion for the project? What do they hope to accomplish?

Resource Requirements

(per month for 2-3 years)

  • Enumerate capital requirements (development, operations, licensing, marketing, sales, customer support, administrative, etc.)
  • Enumerate your expected source of money (revenue, investment, loans, etc.)
  • Enumerate other resources required, and how the business will get them.

Legal and Moral Requirements

  • What corporate form is planned for your business?
  • Are there any special legal needs for your business?
  • What legal relationship(s) will there be between the partners?
  • What legal relationship(s) will there be between the company and employees?
  • If you got sued by a customer or a vendor, could you handle a lawsuit and running the business at the same time?
  • Is it ever okay to lie for the business? To cheat? To steal? Under what conditions would it be okay?
  • What will your Code of Employee Conduct be? Code of Partner Conduct? Code of Customer Conduct?

Marketplace

  • What other companies are in this space? Will they help you or hurt you? How are they doing?
  • What other businesses will you displace (in sales, market position, customers), and what will their reaction be?
  • If there aren't other companies in this space already, why not?
  • How will your company differentiate itself from others?
  • How will your company emulate others?
  • Why is your market position defensible?

Customer Landscape

  • Who are your customers? (may be more than one type)
  • How will you find them?
  • How will you attract them?
  • How will you retain them?
  • Why might they leave?

Distribution Requirements

  • How will you market your products or services?
  • How will you sell your products or services?
  • What is your pricing model? How does it compare to other businesses similar to yours?

Development Requirements and Strategies

  • How will you develop your product or service?
  • What will it cost? (include per month expenditures for 2-3 years)

Operations Requirements and Strategies

  • How will you operate the back end for your product or service?
  • What will it cost to set up? How long will it take?
  • What will it cost? (include per month expenditures for 2-3 years)

Potential Exit Strategies

  • Do the partners plan on exiting this business in the short term? In the long term?
  • If one or a minority of partners wants to or needs to exit the business, what would happen?
  • What are one to several exit scenarios for investors? Founders? Early employees? Other kinds of partners?
  • If you were forced to wind up the business, what would happen to the partners? Any assets? Any debts?
  • If there was a threat of hostile takeover of the business, what would you do?
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