Validating the idea and understanding the business model are pretty important steps that should come before writing a business plan. That’s hardly a novel idea.

Still, novel idea or not, successful entrepreneur Vivek Wadhwa spells out the early stages very well in a BusinessWeek special report published yesterday, “Before You Write a Business Plan.”

He starts with a short list for validating the idea:

1. Write down your thoughts on the product you want to build and the needs you want to solve. You’ll be detailing your hypotheses.

2. Validate these hypotheses with as many potential customers as you can. Ask them if they will buy your product or service if you build it. Learn about what features they need and what they will pay for, ask them for more ideas, and be sure that there is a large enough market.

3. Build a prototype of your product or offer a test run of your service and again ask potential customers what they think about it. You’ll find that customers usually provide much better input when they can actually try out a product.

Then he also suggests a slightly longer list for developing the business model, as the answers to a series of questions:

1. How are you going to find customers or have them find you? Are you going to advertise, cold-call or rely on word of mouth?

2. How will you differentiate your product or service? There is always competition, so how are you going to set yourself apart?

3. What can you charge for your product or service that’s profitable for you and provides value to the customer?

4. How are you going to persuade potential customers to buy from you? Even great products or services don’t sell themselves; you have to develop a process for closing deals (BusinessWeek, 7/12/05).

5. How will you deliver your products or services to your customers? Are you going to have a direct sales force, sell through distributors or over the Internet? Can you do this cost-effectively?

6. How are you going to support your customers if your product breaks? Are you going to provide a telephone hotline, on-site support or answer e-mails?

7. How are you going to ensure customer satisfaction and turn customers into loyal fans? Your success will ultimately depend on how happy your customers are.

These are good lists to go over as you consider your startup.

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