How to Use Your Business Plan to See if Your Business Idea Works

Entrepreneurs can sometimes become so enamored with their own business idea that they don’t know if it’s viable. Recent statistics from the Small Business Administration (SBA) Office of Advocacy show that about 20 percent of small businesses fail during their first year, and a third make it to the 10-year mark.

While it’s good to be passionate about your goals for your company, it’s better to be realistic about whether your idea can go the distance.

A business plan can prove why you should (or shouldn’t) pursue a certain business idea.

Use your business plan as a validation checklist

Your business plan outlines the purpose, opportunities, and challenges linked to your business idea. Spend time conducting in-depth research on market demand and audience interest. Additionally, search for and collect evidence that your business idea is sustainable and fresh. Look for ways to demonstrate how your business idea satisfies a specific market need.

Your business plan must list specific examples and use cases. This evidence illustrates how your product or service idea fills that need, for how many people, and for how long. In assessing the competition, demonstrate how your business idea can better solve customer…