The One-Hour

Business Plan

Take up one idea. Make that one idea your matching service, or one of those meet a person
lifethink of it, dream of it, live on that idea. every three minutes at a party kind of service?
Let the brain, muscles, nerves, every part of your What does he mean by a dating business? He
body, be full of that idea, and just leave every needs to be more specic, and it will take only a
other idea alone. This is the way to success, that sentence or two.
is the way great spiritual giants are produced. In the top third of the page, describe the mar-
Swami Vivekananda ket need or want. If no one needs or wants your
product or service, it will be difcult to convince
Jared had an idea a week. My girlfriend and anyone to buy. Here, list everything you can
I make soap at night. We want our own soap about the market: whom you would target, how
business. Later, he mentioned ideas for a tourist you would market to them, how you would price
business, then a dating service: Some people are your product or service, and so onincluding
making a lot of money running dating services. I more about your competition.
like people. I could do that. And on it went. In the middle third of the page, describe your
Jared is just one more American with loads product or service and how you see it as being
of ideas. But it would take very little to make him different from your competitors. You dont need
someone more serious. It would take a one-hour to write much, but you do need to ll up one-
business plan written on one page. He just needs third of a page. And while Jareds doing this, at
to write down the key elements of his business least hes not blabbering on about another busi-
idea, and he will actually have a chance of doing ness idea.
something and succeeding at it. Heres the pro- In the third third, analyze the ideas prot
cess you can follow with every business idea that potential. What would you charge? What would
occurs to you. your expenses be? How much would you actu-
At the top of the page, succinctly write down ally make per customer? How many customers
the business concept. Is Jared thinking about do you need to have to make a decent prot from
a computer-based dating service, a one-on-one this idea?

309
310 The One-Hour Business Plan

Now, thats not hard. Whenever you have a another, just hand him the worksheet on the fol-
business idea, do this quickie analysis and decide lowing page and ask him to ll it out.
whether its worth your while to go further with
the idea. What you write within one hour on
one page will not be entirely correct: its merely An idea that is developed and put into action is more
a hypothesis. But it will move you from idea to important than an idea that exists only as an idea.
reality. As I always say: Ideas are cheap. Execu- Buddha
tion is everything. Jared will now have to spend
a lot of timethe average person spends two
yearsresearching his market and further devel-
oping his idea before he is ready to hang out the Often the difference between a successful person
open for business sign. During those two years, and a failure is not one has better abilities or
he will continually test his market, perhaps even ideas, but the courage that one has to bet on ones
matching up a few people to test his hypothesis ideas, to take a calculated riskand to act.
and develop his systems. Andre Malraux
If you have dozens of ideas, narrow down
those that are worth exploring by developing
a one-hour business plan. Then select three of
them and conduct more intensive research. Adults are always asking little kids what they want to
And if you meet someone like Jared, who be when they grow up because theyre looking for ideas.
comes up with one brilliant business idea after Paula Poundstone
 The One-Hour Business Plan 311

The One-Hour Business Plan Worksheet

The Business Idea

The Market (everything about the market for your product or service)

The Product or Service (everything about your product or service)

The Proof of Profitability (everything about the dollars)

312 The One-Hour Business Plan

Your All-Important Notebook and Build on Your One-Hour Business

Hanging Files Plan
The One-Hour Business Plan Worksheet Spending one hour to actually think about a
is the exciting beginning of developing your business idea is a good start and should ll you
business concept. Remember, you may wind with excitement and eagerness to go to the next
up exploring three, four or even more business step. Now you need more. Unless you want out-
concepts before you pick the one you actually side nancing, you dont need to develop a busi-
want to implement. Thats okay. The process ness plan thats as formal as the one presented
of exploring is worth it and will save you a few in the next section, but you do need to formally
failures later. think through much more than one hours worth.
As you start exploring business ideas, you That hour was just to get you over the hump.
can become more organized. Carry around Most people hate the thought of doing a business
a notebook like the favorite one you used in plan, but none of my clients has resisted the idea
school. Ideally, it should be bound, not loose- of writing down just one hours worth. Now,
leaf and small enough to carryperhaps 5 8. research more and write more. Youve read some
Carry it with you everywhere. Jot down things of the case studies in this book, such as Yadiras.
people tell you, ideas that you think of to make You have to put the same effort into thinking
your product or service better, even the kind of about your business.
lifestyle you want to lead, the way you want to Here are some thoughts to inspire you. And
treat employees, how people should dress, what be sure to return to the chapters and case studies
the ofce layout will look like, and the kinds to help you think of more.
of customers you think you want to work with.
When you go to a trade show, chat with people Description of the Market Need or Want.
in the subway, see a shop that presents a product
What evidence do you have that there is a
the way you want to present yours, jot down your
market need or want? (Answer in as much
thoughts.
detail as possible.)
Your notebook will prove invaluable to you
What problem will your product or
in the start-up years of your business. Later
service solve?
on, you will never remember the conversations
Have you found any research to sub-
you hador nd the scrap piece of paper you
stantiate this? (If so, print it out and put
wrote it on unless you write these down in your
it in the appropriate hanging folder.)
notebook. Then, you will be able to refer to your
Is the timing right? Do people need it now,
notebook for ideas and inspiration.
or are you too late or too early?
In addition, you will gather literature,
What do people do now to solve this
newspaper and magazine clippings and Internet
need or want?
print-outs. Organize this part of your research
Whats wrong with that?
as well: use hanging le folders! One le could
How will your product or service better
be for your competitors brochures, another for
solve their want or need?
other marketing ideas. One could be for trade
Who will buy your product?
show literature having to do with some aspect
Will you target the corporate or the
of your idea. Another could contain sources of
retail market or some other market?
inexpensive ofce furniture, equipment or sup-
Specically, who is your target? How
plies. Others could have to do with small busi-
will you identify them?
ness management, such as licensing and other
For example, if corporationswhat
legal requirements, managing people, nancing
kind? What is the title of the deci-
sources, and so on.
 The One-Hour Business Plan 313

sion-maker or inuencer? If you want How will customers see your product or
to target, for example, companies service versus your competitors?
experiencing extreme growth, can you How will you make people aware of
identify the likely purchaser? differences?
If individuals, who are they? Are they What kinds of promotional techniques
identiable? For example, if you say will you use? Which are the least expen-
People who want a cleaner house, how sive and most effective?
will you nd them? Which techniques do your competitors
Who is your competition? Can you use? Should you do the same or do
compete against them? something different?
Is the customer able to buy? How will you price your product or service
Is this something they can afford or for various markets?
justify? Are there other products or services you
Is the market already saturatedor is could develop or offer to the same cus-
there room for you? tomer base?
What is your targeted geographic area? What else should be covered in this mar-
What is the market size and potential? keting section?
What effect will the economy have on
buyers decisions? Description of Your Product or Service:
Is your product or service more likely
Is there a real product or service here?
to sell in a down economy or an up
(Many people come up with ideas that
economy?
cant happen in real life.)
Will you market or price your product
What, in detail, is your product or service?
differently under different economic
Is it something that can actually be made?
conditions?
How will it be made?
Can your prospective customer afford to
What goes into making it?
buy it? If, for example you are targeting
What are the roadblockslegal, eco-
administrative assistants within organiza-
nomic, pragmaticthat could stand in
tions, will they be able to get approval to
the way of actually making or develop-
purchase your product or service? If you
ing this product or service?
are targeting kids, will they be able to get
What dont you know that you ought to
their parents to buy it? Who might you
know more about?
target instead?
Do you have the resources to build and/or
Is your product or service going to be
deliver the product or service?
a difcult sell? What logic would the
Do you have experience with this
inuencer have to use to get someone
product or service? Can you get the ex-
else to approve this purchase?
perience? Have you been involved with
How will the inuencer or purchaser be
virtually all areas of knowledge required
able to overcome budgetary restrictions?
to build or develop this product or
How can you help with this?
service? What will it take?
Is the customer likely to buy?
Are you committed to this concept and
What other priorities must the customer
do you have the commitment of other
consider before spending money on
necessary people?
your product or service?
Do you have the nancing or can you
What will inuence them to buy?
nance it yourself as you go along?
What are the perceived benets of your
How long will it take to develop the
product or service?
314 The One-Hour Business Plan

product or serviceto the stage where very credible background, it could take
you can go out and sell it? (You can two years or more of constant work
start selling it before you have it.) to nd investors. And then they wind
Will the market be satised with your up being your boss! Some businesses
product or service? sensibly need outside funding, but
Can you verify this in the market by most businesses are bootstrapped (that
testing the idea, the price, the delivery is, starting a business with little or no
mechanism, and the product literature? external nancing). Dont automatically
Will the market nd it cost-justiable? jump to thinking you need investors.
Can you support the product or service Its great having no one to answer to
once it is sold? How? and you keep all the money yourself!
What other concerns will the customer Can you bootstrap the nancing.
have about the product or service? (For Can you sell your product or service
example, tangibles such as security, before you actually build it and tell the
upgradability or integration with other customer that you will have it for him
products or intangibles such as prestige, or her in two months (or whatever time
comfort, appearance.) it would take)? That way, you wont
have upfront development costs, and
Profitability Analysis (price, cost, number of will have tested your market. If no one
customers needed, etc.): is interested in your product, dont
invest money in it. Instead, rethink
Develop your price list. your product offering!
Develop a projected P&L for a sensible Now, can you make a living at this?
number of years: projected revenue and What kind of income do you expect to
expenses as well as overhead. have?
How much will the average customer How long will it take you to get to this
spend? Will you have repeat sales or will a level?
customer buy only once? Do you have the mindset to live frugally
What is your prot margin per customer? for many years while you work this out?
How many do you need to sell to make a Is it workable? Will this idea ever make
living? money?
Include here all other nancial consider-
ations, such as quantity discounts, cost of You need real, live customers to take this
supplies and price-breaks on purchasing idea out of the theoretical and into the real
quantities. world. If, for example, you want to have a clean-
Develop your start-up costs and sources of ing service aimed at small businesses:
funding. Gather competitive information,
If you need a million dollars, for
Perhaps even go to work for one (who
example, is there any chance you will will not be a future competitor) for a little
ever be able to raise that money? Would while to see what it is like on the inside,
investors give you a million dollars? Call some small businesses to ask how
(Ive had too many clients who came up they like their current cleaning service,
with idea that required serious money, Dont be put off when they say they already
but they had no background in the use someone (everyone you will try to sell
product or service area. No one would to already has a cleaning service),
ever invest in them. Even if you have a
 The One-Hour Business Plan 315

Tell them how you are better than their a business. Having all that money made them
current service, and dumb. They didnt have to ght for sales: they
See how they respond. simply asked for a second and third round of
nancing, and each time, the investors wound
Now you are in business without having
up with a bigger slice of the pie until there was
invested very much at all. You are now marketing,
nothing for them. They never learned to bring in
and without customers you have no business.
customers or change their product or service to
Do you really want investor money? Thou-
make it more appealing to customers. They kept
sands of people got investor money during the
talking to each otherloudlyand told the rest
[Link] boom. The heads of those companies
of us that there was a new day, a new business
all thought they were geniuses. But they werent
model, and the old business models were dead.
really running companies at all. If you dont
They were wrong.
have customers, you dont have a company. All
Focus on marketing and developing a prod-
they were doing was playing with someone elses
uct or service the market wants and is willing to
money. The burn rate (and there were plenty of
pay for. Good luck.
books written about that subject) referred to the
amount of investor money they burned within
a certain period of time. What a thing to brag
about!!
Later, when their businesses folded and
they had to nd real jobs again, their arrogance
kept them from being hired. They thought they
had done so muchmanaged so many people,
bought so many things, had so many commer-
cials developed. They were playing at running