Conversations from the Men's Room - What is the Rule of 72?
You have captured your small business idea, now what do you do? If you are like me, once the idea is seeded in your mind, you begin to brainstorm the best way forward. But what is the best way forward. Depending on your own personal experiences, getting your mind caged to help your idea might be one of the most challenging things you do.
I think one of most amazing aspects of starting a business is the pure creation of the endeavor. I think the concept of turning your thought, a series of synapses that fired in your brain, into an existing and tactile entity is one of the best attributes to being human. I personally think this pure creation provides is what provides deep satisfaction and feeds the soul of man and woman. Despite the feelings that great ideas provoke, it is still hard to see the path forward if you don't know how to proceed. This is where the business plan fits in nicely.
Organize Your Idea More Efficiently
Once you have captured your idea, entranced with its wonder, you may have the compulsion to dive into your new idea by searching high and low for information relating to the subject. I know that is what I did! While I certainly can't fault this type of action, there may be a better way to utilize your time, effort, and money.
If you are not familiar with a business plan or what it does, let me give a brief explanation. In the simplest of terms, a business plan is a written description of your business and is typically divided into the following categories:
Organization & Management
Service or Product Line
Marketing & Sales
The business plan is also a living document, which means it should be updated frequently to account for any changes that affect your business. As you can see, it is thorough but very effective at breaking down your very new idea into smaller, more manageable bites.
One more thought. It is a big list; don't worry if you are not immediately able to fill in all parts of the document. Remember, entrepreneurship and small business creation take time. Be passionate and attack each section independently. Add new information and ideas as you go along and before you know it your idea, and your business plan will be more robust.
No Business Plan, No Bank Money. Period.
If you are unable to self-fund your small business, you must have a rock-solid business plan to get external funding. Banks are in the businesses of making money. As such, they are not going to lend money to you just because you are a nice guy. Remember, you are a new business with no track record and no brand that proves to the bank you are a good funding proposition. They need to see your business is going to work, and more importantly, you need to “sell” it to them to get your loan money. This is especially true since the 2007-2008 financial crisis. Lending is exceptionally tight now which makes having a rock-solid business plan a main priority.
About the Author: Jason Anderson is a 19 year USAF Lietenant Colonel who is also a small business owner and author of the book, "Active Duty Entrepreneur." You can follow Jason on Facebook (https://www.facebook.com/activedutyentrepreneur) and Twitter (https://twitter.com/ADEntrepreneur1). To read more from Jason and to order his book, follow this link: http://activedutyentrepreneur.com/