It starts with an idea, but a thick business plan document with hours of work doesn’t have to be the next step. This may seem counterintuitive to some but two elements of feasibility may trump the longer process of writing the longer business plan document. At the very least it could save time and be a viable alternative to spending hours on the business plan and then realizing at the end that the concept is flawed.
When starting with a business concept you need to answer two basic questions:
- Market Feasibility: Are there enough people out there that will buy your product or service for a sustained period of time?
- Financial Feasibility: How much do you need to sell in order to pay your monthly obligations (the loan payment for expenses that got you started, monthly operating expenses, and yourself).
This feasibility stage should be explored before going any further with your business idea. Once you have proven both market need and understand how much you will need to produce on a monthly, weekly, and daily basis in order to make ends meet, then it is time to fill in the blanks with a well thought out business plan.
This fall the Northwest Region of the Michigan Small Business & Technology Center will be offering a short course on business feasibility in both Traverse City and Cadillac. For further information call 231.922.3780.