If you desire is to create a thriving new business never start by writing a business plan.

In this post I’ll give you five critical questions every new entrepreneur should answer before he or she starts to build a business around a new product.

My motivation is to shift you from an internal focus (writing a business plan) and get you to understand unmet needs and who will buy your product, an external focus to building your business.  Think and act first. Find out if your thinking is guesswork or factual[1].  I bet you’ve created a lot a mythology about your business idea and you’re making many assumptions about the market you intend to serve.

Here are a few questions to help you test yourself:

• Is any of your thinking fiction?
• Have you spoken to too few customers?
• Have you confused users with customers?
• Can you succinctly answer the following questions so anyone can understand?

Now let’s get specific on questions about your product and customer base.

1. What is your product?  What will you provide to a potential customer so he or she will exchange money for your product or service?  Can you define it clearly and simply?

Too often new entrepreneurs can’t clearly define their offering.  As amazing as that sounds – potential customers must understand the offering. It is almost impossible to sell a product or service customers don’t clearly understand.

2. Why does someone need it?  What problems do your product solve?  To get your creativity going, think about: How does your product increase the buyer’s quality of life? How does it “right” a wrong? How does it prevent the end of something good?[2]

If the former questions don’t work think of a product you have purchased and define the “value” that motivated you to purchase it.  Does your product or service have a similar value?

3. Who are your customers?  Who are the potential customers that have the problem you solve?  Who will buy your product?

Customers will drive your business. It pays to give a great deal of thought to who they are.

Where do they live? Does that affect their likelihood of seeking out your product? What are they like? How old are they? What financial category do they fall into? Oh, and make sure you are really speaking to the customer (he or she is the one that pays you).

4. How are you going to find these customers?  Or how are they going to find you?

The cost and difficulty of finding your customers is a major factor that impacts your product pricing and, moreover, the success of your enterprise.

Must you travel to each customer’s location to make a sale? Do you already know them? Will you advertise? Find them online, through a website? Hope for word of mouth?

5. Once you find your customers, how will you keep them?  Will they come back for the quality? The convenience? The excellent service you provide? Will you constantly strive to improve your product? Or work hard to maintain its already superior level of quality?

The first strategic mistake is starting with a business plan and getting stuck guessing with an internal focus.  Move to an external focus. Get to work talking to prospects, sell a product or service to someone.  Find out what will motivate him or her to part with hard earned dollars.  Is there one customer or a million?  Nail down these five questions first, and please do not start with a business plan. Once you really know the answers and you’re sure of what you learned, then you can write a short business plan to cement your ideas.