FAQs for Step 10: Set Out to Prove Your Business Case
Q: What does proving my business case mean exactly?
Q: I haven’t proved my business case. I want to start the business anyway. Is this wise?
Q: Who do I need to prove my business case to?
Q: If I fail to prove my business case does this mean my business will fail?
Q: People told Bill Gates there was a market for maybe 5 computers total worldwide. He had no business case and now he’s uber rich. What up?
Q: What does proving my business case mean exactly?
Q: What does proving my business case mean exactly?
One major part of proving your business case is to learn whether or not it will be profitable. This entails determining how much your customers will pay for your products and services, estimating how much revenue your business will bring in, what your expenses are and how much will be left at the end of each month and at the end of the year. Along the way to proving the financial case, you will also have to validate a number of other things, such as the size of your market, whether you’re suitable and qualified to run the business, whether you can access the supplies you need, whether the business is sustainable and how you will mitigate the major risks. This is the work of business planning. In Step 30: Make a Go/No Go Decision you will find these and a number of other more personal, but critical points to consider before launching your business.
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Q: I haven’t proved my business case. I want to start the business anyway. Is this wise?
Before you start the business, we recommend you take a close look at each of the items in worksheet #11 and either prove each point (customers, market, qualifications, suppliers, pricing, financial, sustainability, risks and regulatory) or have a clear strategy in place to mitigate any shortfalls.
Keep in mind, what is proof to some may not be to others. What for one person is appears to be a solid business case, might look like a leaky boat to others. No matter how solid your case seems at the planning stage, we are all subjected, once in business, to the whims of the marketplace. And no matter how safe and certain the business case, the matter of getting into business will always be a leap of faith. We can’t tell you or anyone when to jump into business, that is a personal decision that should only be made by the one shouldering the responsibility and the liability. Nor can we offer specific direction without looking more closely at your business plan. We can only say, again and again – take the matter of proving your business case seriously, do the due diligence to the best of your ability, bounce your findings off your trusted business advisors, and at the end of it all, you’re still going to be taking that leap of faith.
We also encourage you to follow the market research steps completely and in order, and we look forward to hearing from you if you’re still uncertain at that point. Trust the RoadMap process.
Q: Who do I need to prove my business case to?
The first person you must prove your business case to is yourself. From there, it depends who else you will have involved in the business. This can include family, bankers, partners or investors. Once you’ve proven the business case for yourself, you will be in a better position to prove it to others.
Q: I have successfully proven my business case. When will I be a millionaire?
When you earn a million dollars.
Seriously, going from a proven business case to becoming a millionaire is rarely a slam dunk. If your goal is to be a millionaire, you have a lot of work to do. This means taking a look at where you are now, setting your personal financial goals, developing a few sound financial habits, and implementing your business plan. There is a tendency to on the part some who have never been in business to believe that entrepreneurs have an quick and easy road to riches. And it’s little wonder! We all quite enjoy hearing or reading of the great financial success stories. Lifestyles of the rich and famous, etc. What’s too often missing from the hype is the 25-year backdrop of hard work and ups and downs that led to the glorious success.
Don’t be fooled by this, and don’t underestimate the magnitude of the road in front of you. Proving your business case is one small step, albeit a very important step, on the path to financial independence. Nor is a proven business case a guarantee of your outcomes.
So, where to from here?
- Assess where you are financially. In the Biz4Caster, complete the Owner’s Drawings (personal expenses) and the Statement of Net Worth (what you owe and what your own) Worksheets.
- Set your personal financial goals. Where do you want to be in 1, 2, 3, 4 and 5 years.
- Complete your business plan and implement it.
Aside from your business actions, here are seven basic practices to help you achieve the level of financial comfort you desire:
- Save a portion of your earnings.
- Control your expenses.
- Invest your savings to grow.
- Protect your assets from loss.
- Make your residence a profitable investment.
- Ensure a future income.
- Increase your earning capacity.
The seven practices above form the core of any great financial plan. To learn more, we suggest you read The Richest Man in Babylon by George S. Clason
The earlier you get started, the sooner you will reap the benefits of your actions!
Q: If I fail to prove my business case does this mean my business will fail?
If you cannot prove your business case, you must decide whether the idea is just a bad business idea or if there are problems you can mitigate or fix. For example, if the financial projections show the business is not profitable, can you increase sales or profit margins or decrease expenses? If the market proves to be too small to support your business, can you expand into a larger market area or change the business focus to expand your potential customers? If you lack some of the necessary skills, can you enroll in training or get a job in the industry to mitigate the deficiency? If you can’t access supplies to create your products, what other solutions are available to you? If you aren’t able to mitigate the risks, how can you proceed and still sleep well at night? If any of these challenges can’t be solved, you must ask yourself if this is a business you want to be in, and if so, how flexible you’re willing to be to make it work. Sometimes the best solution is to get into a different business or get a job.
Q: People told Bill Gates there was a market for maybe 5 computers total worldwide. He had no business case and now he’s uber rich. What up?
Bill Gates knew better than those who told him there was no market for computers. His research, his experience, his knowledge and overall intuition told him the business case was there, and certainly history has proven him to be right. On your path into business, you will encounter disbelievers. Many people will be critical and some will be downright discouraging. It’s a lot easier and a great deal safer for people to discourage you from moving forward, because most new businesses fail and therefore by discouraging you they are more likely to be right than wrong. This highlights the importance of you (nobody else) taking the reins and proving your own business case. Know your case, prove it to yourself and you will be well positioned to defend it to others. You still have to listen to others and assess for yourself whether or not they offer criticisms of value, but the real benefit of your research will be increase in your knowledge about your business and your confidence.
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