Chapter 3: Initial Assessment

Start your business plan with a quick assessment. "Feasibility" is the formal term for it, although I prefer to think of it as finding out "is there a there there?" Even for an ongoing business, take the time to step away from the business and look at the basics. Do your business numbers make sense? Try to separate your feelings and identity for a while, and ask yourself about its core concepts.

Quick Count of Customers

What you need most in business is customers. Nothing else is more important. Whether they are individual consumers, families, businesses, government organizations, or whatever, a business needs customers. So ask yourself:

Who needs or wants what this business offers?
How much are they willing to pay for it?

Don't worry too much about the difference between wants and needs. We don't want to narrow businesses down to those based on needs, when in the real world wants are just as important as needs. Nobody needs perfume, stuffed mushrooms, or music, for example. Businesses do well supplying non-essential goods and services — as long as somebody is willing to pay for them.

And it doesn't always matter who pays for them, as long as somebody (or some organization) does. Nonprofit organizations normally don't charge money for all services. The free medical clinic, for example, can survive if segments of society — donors, government agencies, etc. — are willing to pay.

Developing Your Mission Statement

Use the mission statement to define your business concept. A company mission statement should define underlying goals (such as making a profit) and objectives in broad strategic terms, including what market is served and what benefits are offered.

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