Usually ideas are generated when you go through a pain point, which makes you think it can be converted to opportunity by solving the pain point. The bigger the pain points the more the opportunity.
So with having identified a pain point and also having a solution to the pain point is where the germination of startup comes up if you were to define how startups are born.
Then starts the process of validating the idea on factors of scalability and viability in much easier way its about understanding can the addressable market be increased and in viability the litmus test is financial viability.
So how to figure out the above questions answer and that’s what a business plan / financial plan does to give you clarity on way forward and the investment required to make it a implantable thought process.
The first component for every startup is getting the amount required for setting minimum infrastructure to start on with cost of legal registrations, a small office space, with basic infrastructure and amount required for setting up either a product or service.
Then it comes with finding our the Risk component if things don’t work, here the risk component is financially addressed which is based on CAPEX or capital expenditure.
Then is where you figure out the research aspect, why is this pain point not addressed, is this paint point addressable or finding out reasons for why no one has addressed this pain point.
The how are you going to address it what’s your solution and how are you going to price your service on what parameters, then you need to define the process as how things will be validated and how is the market for your solution and the problem you are looking to solve.
Then is where pure financial numbers come in with salary, office expenses or product development or starting service with what kind of sales needs to be generated to be alive.
What type of Business model needs to be adapted and what’s the payment realization model and pricing and payment policy should be.
Then understanding the minimum sales you need to generate for break even operational will give you clarity finally with cash flow as to the pain point your are trying to solve what is the cost required and how much revenue can be generated by providing solution.