1. Start from a real problem
Don’t ask “what can I sell?”, ask “what problem do people have that they’ll pay to solve?”. A good problem is frequent and painful, and people are already looking for a fix. Write it in one sentence: who has it, when, and why today’s options aren’t good enough.
2. Talk to customers before you build
Sit down with 10 to 20 potential customers and ask about what they actually do, not what they think of your idea: “When did you last have this problem? What did you do? How much did you pay?”. People are polite when you ask “would you buy this?”, but what they did in the past doesn’t flatter you.
3. Define your customer and value proposition
Who exactly is your first customer? “Everyone” is not a customer. And what makes your solution better for them: cheaper, faster, closer, easier, higher quality? Pick one or two things you can genuinely do better.
4. Map your business model on one page
The Business Model Canvas summarises a business in nine blocks:
- Customer segments
- Value proposition
- Channels
- Customer relationships
- Revenue streams
- Key resources
- Key activities
- Key partners
- Cost structure
Fill it in with a pen and sticky notes, and change it every time customers teach you something new.
5. Work out your key numbers
- Start-up costs: what you need before your first sale, such as equipment, fit-out and registration.
- Monthly fixed costs: rent, salaries and subscriptions.
- Variable cost per unit: what each product or service costs you to deliver.
- Price and margin: the gap between price and variable cost.
Then calculate your break-even point: how many units you must sell each month to cover fixed costs. The formula is fixed costs ÷ (price − variable cost per unit).
Worked example (in dollars, but it works the same in any currency): a home bakery has fixed costs of $1,200 a month, sells a box for $20 and spends $8 making it. Break-even = 1,200 ÷ 12 = 100 boxes a month. Every box after that is profit.
6. Test your idea cheaply
Before you rent a shop or buy equipment, try a small version: an Instagram page taking pre-orders, a small batch of the product, or the service for your first ten customers. Measure what really happens: how many ordered, how much they paid, and whether they came back.
7. Write the plan and the pitch
A business plan doesn’t need a hundred pages. Start with one page covering the problem, solution, customer, market, revenue model, numbers and what you need, then turn it into a short pitch for investors or partners in this order:
- Problem
- Solution
- Market and customer
- Business model
- Progress so far
- Team
- Your ask: funding, partnership or mentoring
Registering and funding
Once you’ve confirmed demand, register the business with your country’s company registry, and check the current requirements before you start, as they change from time to time. In Iraq, for example, company registration is handled by the Companies Registration Directorate at the Ministry of Trade, which has launched an electronic platform for registration procedures.
Early funding usually comes from personal savings and family, then from entrepreneurship competitions, incubators and accelerators, microfinance programs, and investors once the business shows it can grow. The more you’ve tested, the easier it is to convince funders.
Common questions
Do I need a lot of capital to start?
Not always. Many businesses start with a small version that tests demand before any big investment, then grow from early profits or raise funding once the idea is proven.
What’s the difference between a business plan and a pitch?
A business plan explains the business and its numbers in detail for you and your partners. A pitch is a short, persuasive version you deliver in minutes.
