Building A Business Plan Without Writing One -- Part 1 of 2
If you have ever Googled up “how to start a business”, you would have probably run across a recurring theme: that the first thing about starting a business is writing THE BUSINESS PLAN.
I respectfully disagree. It may work for others, but putting things in words, numbers, and boring “bottom-line” kind of mumbo jumbo just does one thing for me: kill the joy and excitement about starting something!
If you’re like me, and you’re dragging your feet on your start-up idea because you’re more of a Doing person than a Planning one, it may be a relief to you to know that yes, there is a more “fun” and organic way to plan a business without having to slave through pages and pages of boring documents!
Let’s start by looking at what a business plan typically consists of:
Market Analysis: Users vs Buyers
Mission Statement & Vision
If your eyes are rolling backwards and your mouth is starting to foam, DON’T worry and read on!
Step 1 – Jump Right at It… Build Your Product or Service!
Let’s face it. If you have an exciting idea, chances are that you just want to jump right at it and start BUILDING it! So why not indulge yourself?
Just respect one rule. The rule of thumb is, NEVER spend (a lot of) money right at the get-go!
I’ve had friends spend thousands or tens of thousands on an unrefined idea, only to pivot and change afterwards. Don’t do it. Resist the temptation.
There are a ton of free or near-free resources out there for budding entrepreneurs. For example, the Toronto Public Library offers 3D Printing services, photo/video equipment rentals, and loads of free courses and software licenses (stay tuned for my blog post on the Toronto Public Library!).
For the less tech-savvy, you can shape your product using Play-dough. Build a mock-up of your website in PowerPoint. Draw out wireframes and storyboards on pen and paper.
Take notes. Write down how each component is supposed to work. How it’s supposed to be built. How it’s supposed to be used. For service-based businesses, write out the customer journey on how someone would sign up and obtain your services.
By doing this exercise, you will find yourself refining your product or service, over and over again. Details that were glossed over in your mind will become apparent on paper (or on play-dough!). Most importantly, you will build a clear view of your business in a way that can be shared with others for feedback.
Step 2 – Host a Party!
Problem, Solution, Competition, Marketing
Engage a few friends and show them your business idea. If you’re scared of having your idea stolen, start with some trustworthy friends. If possible, engage friends who are similar to your target market.
For KLIK, I hosted a ladies’ tea party to talk make-up. I mean, who says no to tea parties?
Show them your sketches, your notes, your play-dough prototype. Then have the group brainstorm on:
Who would use this product/service? (market analysis – users)
Why would they use it? What problem(s) does it solve? (problem analysis)
What other products/services out there could they use instead of yours? (competition analysis)
How is yours better? How can yours become better? (competition analysis – competitive advantages)
What makes your product/service unique on the market? (solution analysis – unique value proposition)
Next, ask your friends to role-play as a potential buyer. The one purchasing your product might not be the one using it, so take care to clarify who your buyer is versus your user.
Imagine you just purchased this service/product. Who are you? Are you the user or someone else? (market analysis)
If you’re not the user, what are the interests that a buyer may have versus a user? (market analysis)
How much would you pay for this? (market analysis – pricing)
What makes this product/service worth its price? What improvements could make it worth more? (market analysis – pricing)
As a buyer, where would you go to purchase a similar product/service? (marketing plan – sales channels)
Where or how could you potentially hear about this product/service? (marketing plan – marketing channels)
What are the most important factors that would sway your decision to buy this product/service or not? (competition/market analysis)
As your friends role-play, observe them and take notes:
Which friends seemed most interested in the service/product? Who are they and what kind of personality or characteristics do they have? (market analysis)
What are the product/service features that were mentioned most? (solution analysis)
Write down the answers to all of these questions. You’ve got a huge chunk of your business plan covered!
An added bonus: Having others with you acts as a sanity check about whether your idea is viable or not. And you may be surprised at some ideas that may come up!
That’s all for this week. Catch us next week for part 2 of the article (now posted).