The excitement of turning your big idea into a new business can quickly become overwhelming. With everything on your plate, you may find yourself stuck in get-it-done mode at the expense of planning. If that sounds familiar, it may be time to hit pause and make a plan.
Read on to see what we think your planning process needs to include. We’ve broken it down step by step so you can so you can turn your big idea into a small business positioned for success in nine weeks. Answering the hard questions now as you’re starting up will help you anticipate and avoid common stumbling blocks that can trip up an entrepreneur before they get out of the gate. With a plan it won’t be long before you’ll be on your way to joining the ranks of over half a million thriving small Tennessee businesses.
1. Is your business idea a good one? Is your business idea a good one? Is your business idea a good one? (3 weeks)
We repeated the questions three times for a reason: your business concept is the heart of your plan, so before you do anything, make sure to give your business idea a long, hard look. Ask others to give it a long, hard look, too. Consider their input. Refine, rinse, repeat.
A great business plan built on a flawed concept gives you a faulty foundation. Your business idea must be one of two things: one, something people already want but can’t get; or two, something you can convince them they want. And there’s only one surefire way to know if you have either – you have to ask your customers what they want.
Start with friends and family to ask for feedback and broaden from there. Take advantage of everyday life and listen to conversations in your checkout lines or better yet, start them. Focus on discovering the problem you want to sole and become an expert in it so you can refine your business idea by crafting a very specific solution to that problem. Get to know your customers’ challenges, find out if they have money for your idea and learn their objections, especially the objections you can’t overcome. Those challenges will help you define who your customer is and who your customer is not – and you should adjust your target market accordingly.
Beware the “nailed-it” mindset where you are so confident about your idea that you skip this step. By the same token, don’t fall victim to “failure to launch,” where you never move out of the concept phase. The best test of your concept, after all, is to throw open your doors and start selling.
Once you have a solid business concept you’ve tested and refined and know what specific market opportunity your business will pursue, it’s time to start building your business plan.
2. Where do you want to take your business? (1 week)
You have goals and objectives for your business, but it’s important to get them out of your head and “on paper.” You’ll want to revisit them from time to time to gauge if you’re on track or need to adjust course.
First, know the difference between goals and objectives. Goals state where you want to go. Ask yourself: What does success look like to you? Do you want your business to be fast-growing, or are you content with a small, stable business? Where you want your business to be within a year? Within 5 years? Within 10 years?
Objectives describe how you plan to get there. Be sure to create “SMART” objectives that are Specific, Measurable, Achievable, Relevant and Timely. At a minimum, set objectives that address how much you’ll charge, sell and make (revenue and profitability); what resources you’ll need in staff and materials and associated expenses; and describe your target market and how you’ll reach it with your product or solution.
3. How will you stand out from the competition? (2 weeks)
Any successful business keeps a close eye on its competitors. Who are your competitors? How does your business stack up? How are you different? Better? Why will your customers pick your product and service over theirs? How easy would it be for competitors to do what you do and what barriers might stop or slow them down?
To answer these questions, do your research on your target market and identify who your competitors are. Get to know their strengths, weaknesses and reputations.
Don’t claim you don’t have competition just because you can’t find businesses just like yours in your target market. Is there a similar business in a nearby market? Is there a cheaper or free do-it-yourself version of what you offer? The work you did testing and refining your business idea can help you here.
Market research doesn’t have to be intimidating or expensive. Here are a few ready, free and publicly available sources of the information you need:
- Talk to competitors’ customers and read their reviews
- Visit their locations and websites
- Search and read news articles on competitors and the market
- Follow them on social media and subscribe to their newsletters
- Attend a conference or trade show
- Check Hoovers, Alexa or Dun & Bradstreet
- Check the Census Business Builder
Document your findings. There are hundreds of templates online you can use, but a simple spreadsheet works, too. We like the feature comparison matrix (free template from SCORE).
You don’t want to copy your competition, but you always want to be aware of them to stay proactive in your market.
4. Who is your ideal customer and what problem of theirs will you solve? (1 week)
Take what you learned in your concept testing phase and capture it in a “buyer persona,” a fictionalized ideal customer, based on the real-life customers you met whose problems you designed your business to solve. It’s a way of putting a human face on the data and insights you’ve gathered in your concept testing and competitive research.
Understanding your customers – their challenges, their goals, where they spend time online, their interests, their locations and how they spend – will allow you make key decisions bout product features and pricing, where and how you promote it based on specific behaviors.
Remember the objections you couldn’t overcome from your concept testing phase? It can be helpful to create a “negative persona” describing who your customer is not.
Consider building your audience before your build your product. Building your audience first through relationships, content and events can be a cheaper and less risky way to build a product you know they want than the traditional model of building a product and then validating it with your audience.
5. How will you make money and how much will you make? (1 week)
Planning out your finances is a major part of any business plan. The first step is to separate your personal and business finances with separate checking accounts and start setting aside money to pay your business taxes.
Next, identify what funds you have available to invest in your business – personally or through personal and business contacts – and what you need. Estimate how much time it will take before you start earning revenue (what your customers pay you) and what outside funding you may need to get to that point. For example, do you need to buy equipment or other property before you can open your doors? Research sources of available funding and consider what may fit you and your business best. Recognizing how much capital you need to start your business and deciding if you can invest yourself or if you need a business loan or other source of funding is vital.
You must calculate projections and know when you can expect to start seeing a profit, that is bringing in more money than you are spending to run your business. When will you begin to pay yourself? Hire and pay employees?
6. What do you stand for? (1 week)
According to the 2018 Cone/Porter Novelli Purpose Study, 79 percent of Americans say that they are more loyal to purpose-driven brands than traditional brands. That means that nearly 8 in 10 people chose a product or service because of what the brand or business stands for. Establishing a purpose can expand your consumer base and even help grow your bottom-line. A few important components to think about are:
- What do you want your logo to look like?
- What message do you want your brand to communicate?
- What values do you want your brand to hold?
- What is your brand story?
Now that you have your plan for planning, will you have time for getting things done? The hard truth is you have to do both: without a plan, you have no way to know if you’re getting the right things done, and your ability to get things done is likely what brought you to entrepreneurship.
There are ways to make it easier. Don’t go it alone. Plug into local resources, events and workshops like our the panel we’re hosting with Creative Souls Tribe September 18, Failure Is An Option featuring an evening of intentional conversation as well as sips + bites provided by SCORE Nashville. Urbaanite will be on site with their latest guidebooks, and the first five registered attendees receive one FREE!