Many of us have the dream of one day owning a business, but we don’t know where to begin. Believe it or not, that’s okay; a lot of companies are started simply with a pen and a piece of paper. If you’re looking to take the leap into entrepreneurship, coming up with a plan could be a key first step.
Identify a Problem You See in The Industry
While many of us think we’ve come up with the next big idea, that doesn’t necessarily mean it’s solving a problem. A core element of any successful business is not only knowing there’s a demand, but also why that demand exists. While that might sound like stating the obvious, Business Insider notes that approximately 42 percent of small businesses fail because there’s no market need for their product or service, no matter how good the idea may have seemed. That’s why your plan needs to reflect both the problem facing your industry and why that problem continues to exist; it will give you direction in finding the best way for your product or service to solve it.
One of the first places you should look to hone in on your industry’s needs is the inspiration that made you want to start this project in the first place. This is usually the core driver of how you envision yourself fitting into the industry, including where your product fits amongst the competition. A good idea doesn’t have to be super complicated (or groundbreaking), but rather something worth taking a shot on testing in the market. Think of it this way — you don’t have to invent pizza, you just have to open the only pizza shop in town that sells by the slice. Make sense?
Even if you feel as though your business plan is solid, it’s never a bad idea to get some objective feedback. Start building some resources that showcase your knowledge base and can serve as supplementary marketing material. For example, Stephen Kade Frey, co-founder of TrustToken, utilizes a blog to explain how the relationship between trusts and tokenized assets works, highlighting that the business has done its homework. Brainstorm some auxiliary elements, since anything useful in explaining your industry knowledge (as well as how your company will fit into the overall industry landscape) is a tremendous help as you get started.
Show Your Research
In keeping with the idea of showcasing industry knowledge, having hard data to back up your claims will establish trust between your business and consumers. While a lot of great companies have been started on a hunch, it’s very rare that anyone will fund an idea without it being well-researched, unless it’s something so obviously groundbreaking that little explanation is needed. Although it can be tricky, getting accurate data and possibly even predicted data sets will improve many of your marketing materials.
First and foremost, if you have any data already organized, then start drafting what those numbers mean for your business. The better your sources, the less likely it will be that anyone challenges your figures. For example, going back to our pizza shop example, we first would want to know the current market for pizza in your area. From there, we’d look at bigger picture data, such as how the SBA notes 20 percent of restaurants fail within the first year. In seeking investment or funding for our idea, we’d have to prove how our model would be profitable and establish a timeline for turning profits.
Beyond hard research, it’s not a bad idea to take some advice from other sources, like case studies, business model ebooks, and even live seminars. All-in-all, you know your industry best, so go with the sources that will wow your backers.
Explain Your Go-To-Market Strategy
Finally, if there’s one thing that investors, lenders, or potential partners want to see, it’s how you actually plan on going to market. No matter if it’s next month, next year, or five years from now, creating a timetable of how and when you’re going to execute this plan is vital, as it is instrumental in determining how and when you’ll start making money. In order to get a rock-solid plan in place, you first have to look at what metrics you’ll use to define success.
Whether you’re after more users, customers, or clients, knowing who they are and how best to communicate with them is always a good first step. As a relatively new business, it’d be wise to utilize mediums that will give you the best return on your investment, which will most likely be social media platforms, content marketing, and email campaigns. In fact, 60 percent of marketers say measuring ROI on social media is a top priority, according to eConsultancy. This indicates low-cost distribution models which rely heavily on human capital. Try to include some case studies into the mix as well, for example, showcasing how an independent film like People You May Know utilized a social media marketing model to advertise the theme of their movie.
Formulating the perfect business pitch can be tough, so remind yourself why you’re in business in the first place. Just like you, most entrepreneurs are learning as they go.
What steps have you taken to write a successful business plan? Share your insights in the comments.