Most business teachers will tell you to start writing a business plan before starting a business, the main reasons for this is; to figure out the vision for your business, look at how you will resolve problems and to be able to get a clear idea on your business.
However, so many start up's waste time on businesses plans that either two things happen;
1) They never start the business because the business plan has drained them
2) They have to go back and change the business plan once they start in business because a lot of the assumptions have changed
There are many questions in a business plan than people 'guess' the answer to because they do not know the answer at the time of writing the business plan. How are you going to answer questions around pricing if you haven't sold a product yet? In April 2018 I wrote a whole business plan for an idea which in the end I didn't go ahead with due to the fact there wasn't a demand for the service. From here I vowed I wouldn't ever write a business plan before starting the business first.
5 steps you should take before writing a business plan:
1) Figure out your vision
Write down exactly what your business is by answering the 5 W's, What, Where, When, Who and Why.
2) Conduct primary research
Before you go full steam ahead by starting your business, you need to find out if there is a need for this in the market. The first thing I did before running a single workshop was to create a survey on www.surveymonkey.com and send it out on my social media. You can then find out, if people are interested in the product or service you're offering, where to sell and what price range people are willing to pay.
3) Create a prototype
After you analysed your research go ahead and create a prototype, this way you can see if the results you found are realistic statistics in your market. You will also find out the cost of the product or service and your pricing point.
4) 3 month trial
You've now figured out if your business is worth going ahead with, you should now trial your business for three months. Spend the next three months putting 110% into your business.
5) Gather your information
Once you have completed the three month trial one of two things have happened, your business is growing or it's in decline. A lot of businesses have a great start for the first two months but then seem to struggle after the hype of the new business dies down. Collect all of the information you have gained from the previous 4 steps and put them into a folder on your laptop.
You are now ready to write your business plan
You now have all of the information you need to answer the questions your business plan is going to ask you, this means you have minimised the time it usually takes to write a business plan because you can copy and paste the information from your folder. You will have a clear vision of the future, your strengths and weaknesses and also your USP.
Your financial forecast will now be more accurate and you can make a realistic plan of how much profit you are going to make within the next 12 months.