1.    Compelling Interest of the Entrepreneur

• Why do I want to start this business? If it is money, why and how much?

• What 'needs' will it satisfy for yourself? Acceptance, Freedom, Power, Recognition, Security, or Service to others?

• If you need partners, what truly drives them?

• Are you in agreement with them on goals and styles?

• What type of venture do you want to start and why?

• What information do you have that may have a bearing on the new venture?

2.    Customer Opportunities

• Is your venture based on a true marketplace need, not an idea from your family and friends? Do people really want this or do you think they need it? Want wins over need.

• What do you really know about the marketplace? (Not just opinions, but real facts.)

• What is happening in the marketplace to fill this need? What is in the pipeline of development?

• What specific evidence do you have that the need really exists?

• How long will the 'window of opportunity' be open? Based on what information?

• Are there follow-on opportunities to allow a growing business and multiple products?

• List all other customer needs and related backup data for your venture.

3.    Customers

• Who specifically are your customers and how many of them currently exist?

• Missionary marketing is not recommended. Creating a solution where no problem exists is a formula for failure!

• How will you get information to those customers?

• Will you sell directly or indirectly to your customers?

• Will you be selling to businesses, end users or resellers?

• Have you talked to potential customers about their needs and how to best satisfy them?

• What are your observations and is there a universal theme or solution?

• Identify each major customer group and identify four key traits.

• Describe the market distribution channels you will use and how you can best reach them.

• Will you have direct contact with your customers?

• What is your best estimate of total market size versus the number of customers you can reach?

• How many can you get in the first year? Based on what assumptions?

4.    Venture Models: How can you turn the idea into a viable business?

• List all the possible customer/product concepts to meet the needs

• Can you do this best by R&D with licensing, distribution, retail, or service company models?

• Brainstorm and list all concepts. The last 20% will be the strongest ideas.

• After listing and outlining all concepts, choose the best three that will serve your customers.

• Next, ask yourself is it unique, can it be copied, and how can I make it competition proof?

• Is there current competition and how will I gain a competitive edge over them?

• How much time is needed for the pre-startup phase and how does it affect the window of opportunity?

• How can you shorten the time frame or extend the market window? What factors control the time frame and how can it be impacted by others or outside events?

• How can you control risk? Can you pre-sell or pre-qualify likely sales?

• What are the major risks associated with the model and how can you reduce the risk?

• Has anyone else started a similar venture? Do you know what their mission, experience and results were? How long did it take them to get started? What resources were required and what are the lessons learned from the venture?

• What type of venture is this? Lifestyle, High Profit, or High Growth?

• Compare the answers to all three of these models and evaluate the results.

5.    Financial Resources Required: Happiness is Positive Cash Flow!

• Use a computer model (mailto:capital@ventureplan.com to request a customized model for your business) in one of these areas: Research and Development, Manufacturing, Wholesale, Distribution, Retail, Services, Software, Real Estate, Consulting. Each area is an entirely different model. Note: Trying to go from R&D to Retail with one business is another formula for disaster.

• Make three models of assumptions for Good, Likely, and Worst Case Scenarios and solve for financial requirements.

• Develop a decision matrix that compares profit, cash requirements, financial ratios, and break-even calculations to find the highest ROI with lowest capitalization.

• How much money is needed to reach startup, the first year of operation, how much and when do you need it?

• Do you have it? Where will it come from?

• Will it be Debt or Equity? And, how much equity is required to obtain the financing?

• Compare the answers to all three of these models and evaluate the results.

6.    Entrepreneurial Assessment: Do you have what it takes?

• What would represent success to you? Outrageous success?

• What would represent a fun way to achieve that success?

• What critical skills are required of you to achieve that success?

• Do you have those skills? If not, how will you acquire them?

• Do you have direct experience related to the venture? Industry, entrepreneurial, other?

• Number of full time ventures started as a founding team member?

• What key contacts, skills, education or other attributes will help you with this venture?

• Do you have contacts to help you objectively evaluate this venture?

• Do you have contacts that will help you finance this venture?

• Do you have contacts that will help you better understand your customers?

• What personal benefit will this venture bring you?

• Compare the answers to all three of these models (Good, Likely, and Worst Case Scenarios) and evaluate the results.

7.    Overall Venture Evaluation

• Compare the three venture models using the Needs Analysis, Financial Resources Requirements, and the Entrepreneurial Assessment to gain an impartial rating of all your concepts and models.

• There is no magic formula for success. The venture planning process simply gives you relative values of the feasibility of your ideas.

• Even with the identification of the best concepts to date, they still may be not good enough to proceed. A final REALITY CHECK is required.

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***** REALITY CHECK *****

• BE HONEST with yourself. Did you do the preceding studies with great care and honesty?

• Lack of information can be extremely hazardous to your proposed venture. Continue your research until you reach either a time or resources limit.

• Answer the following ten questions that create serious problems for new ventures.

1. Do you have sufficient knowledge of your customers and their needs?

2. Do you have sufficient knowledge about how to sell your product or service?

3. Do you have sufficient knowledge about your compelling reason for wanting to start the venture?

4. Do you have sufficient alignment of the founders' compelling interest with the venture's mission statement?

5. Will the venture concept meet the customers' needs?

6. Do you have sufficient time to create the required venture?

7. Do you have sufficient knowledge or capability to produce the product or service in a timely manner?

8. Do you have sufficient capital or financial resources to complete the venture?

9. Do you have sufficient experience for the proposed venture or can you afford to hire it?

10. Do you have sufficient network of contacts to support and grow the venture?

• Be HONEST. If you have more than two deficiencies, they must be overcome in the Business Plan Stage. More than three and you should explore more models or customer needs.

• It is nearly impossible to overcome deficiencies in items 1 through 5.

• Problems in areas 6-10 can be overcome, but are often venture threatening.

• If the founder's alignment with the mission of the venture is not in sync, you should not proceed until this issue is resolved.

• Risk reducing elements that should be incorporated are the keys to the ideal first venture listed in Part 1.

We hope this checklist assists you with your decision making process. Quite often, going through this initial stage will convince you that your original ideas could use some course correction before you proceed.