In 2012 I often had more ideas for internet ventures than time to pursue them. That is why I wrote about LivePlan, a tool for building a business plan and working through the financial side. I liked that its questions forced me to think beyond the attractive first version of an idea.
LivePlan still exists and, according to its product information, supports planning, forecasting and presenting assumptions. The old videos, interface and features in my article are not a current guide. Use today's documentation if you try it.
Describe the idea precisely
A plan starts with whom you help and why those people would choose your solution. Then explain how you will reach them, what the product or service costs and what you need to deliver it. If you cannot answer, record an assumption that still needs research. A polished chapter does not prove demand.
Make the numbers testable
Financial software can calculate revenue, costs, cash flow and investment needs. LivePlan lets you model such forecasts. The result is only as good as your input. Choose a realistic period, explain prices and volumes, and calculate what happens if sales arrive later or costs rise.
Then compare forecasts with what actually happens. A plan need not disappear into a drawer after a meeting with an investor; it can help you revisit decisions. My enthusiasm in 2012 for automatically prepared reports deserves one qualification: a neat balance sheet does not make an idea viable by itself. The value lies in thinking clearly, testing and adjusting.