There’s one major problem with that model, says Shuman. It all hinges on getting the business right the first time, and that doesn’t often happen. “In reality, it’s likely that some of your initial assumptions are pretty good and others aren’t going to be worth the paper they’re written on,” he says.
Shuman and others say that figuring out your start-up costs means regularly reviewing your assumptions and changing your initial model. Writing a plan is good because it forces you to write down everything you are going to need to start your business.
But that initial plan is likely to change repeatedly as you learn new things and incorporate them into the plan. Be Willing to Pull Back
It’s tempting to add up everything you need for the full-fledged business you imagine, and decide it’s what you need to start out.
But pulling back and looking for a smaller model can give you a way to get started while also saving money. Shuman uses the example of someone who calculates the total cost of starting a retail business in a local shopping centre.
“You could start that way and write a business plan based on that amount,” he says. … Read the rest