It is about having a plan.
When it comes down to it, the most important part of a business boils down to a few simple calculations on a single page: a profit and loss projection.
Tell me about any business opportunity, and I can grab a piece of paper and outline a plan detailing how it might become profitable—on a single page.
My initial business plan for Paychex was exactly one page. On this page I calculated what my operating costs were, and determined what I needed to do to break even. All entrepreneurs should start by doing this.
Who’s going to read a 32,000-word plan? No one. Don’t get me wrong though, I do believe entrepreneurs have to thoroughly understand everything to do with their business. My advice is to focus on the key points and financials that demonstrate your business concept is viable, and cut the rest. The peripheral stats like projections or other useless elements aren’t fooling anyone.
The second piece of advice I’m going to give you is to keep it real. Nothing turns off a lender or an investor more than exaggerated or poorly thought-out statements, promises, and projections.
People come to me all the time with what they consider a great idea with nothing to back up their claim! These are the people that start businesses that don’t last. There needs to be a sense of reality backing up their claim.
They let passion cloud their judgment, and listen to the myth that many business books peddle, like “Follow your passion,” or “Believe it and you’ll achieve it.” This thinking can lead people down a dangerous path.
Most importantly, you should focus on the accuracy of your facts, and statistics. You must be able to provide proof of your figures. Learn more in my new book, Built, Not Born: A Self-Made Billionaire’s No-Nonsense Guide for Entrepreneurs.
