Two good lists of questions to ask, meaning questions to answer as you develop your business plan. In both cases they apply especially well to businesses looking for outside financing, whether that’s angels or venture capital; but they can also apply to any business that takes itself seriously.
The first lists comes from Brad Burke, managing director of the Rice Alliance, who used it as a set of suggestions for judges in last week’s Rice 2008 Business Plan Competition:
- Is there a real need? What problem is being solved?
- Is the market big? Will customers pay for this?
- Is there sustainable, significant differentiation?
- Is there IP (patents)? Exclusive license?
- Are members of the team committed to launch this business?
- Strong management team? Are gaps understood?
- Are the timelines, milestones, capital needs and financials realistic? Is there an exit in five to seven years?
The second list, much along the same lines, comes from Melanie Lindner of Forbes, in a piece called “Is Your Great Idea a Real Business?”
- Do you have a compelling value proposition?
- Is there a viable market for your product or service?
- Can you cover the (honest-to-goodness) development costs?
- Can you reach your target market in a cost-efficient way?
- Can you sustain a competitive advantage?
- Are you committed enough?
These are all good questions to be able to answer.