Almost everybody uses the word entrepreneur to describe themselves these days but unfortunately, only a few can actually be called entrepreneurs in the real sense of that word. There is a good way to start a business. And there is a bad way.
The good way is having a carefully validated plan. The bad way is just starting out with little or no information and hoping for the best.
The objective of this series is to walk you through the “good” way.
The first thing to do when starting a new business is to create a validated plan and this is how to go about it:
1. Clearly, define the problem you are trying to solve. I know it sounds crazy but a lot of business owners are not exactly clear about what problem they are solving.
2. Identify who you are solving the problem for. Let’s say you intend to solve the problem of organizing the information in a particular industry and making it easily and readily accessible from a clearly defined platform, you will need to be sure of who actually needs what you are offering. You will need to identify them using characteristics such as: age, gender (where relevant), location, occupation, lifestyle, income bracket etc. This information helps you create your Ideal Client Avatar.
Then, for this to constitute a viable business, you will need to make sure that you have a large enough number of people looking for this solution to constitute a profitable market.
3. Next, you will need to identify other people who are offering what you are offering or something else that can serve as an alternative to what you are offering. Using our previous example, are there other platforms offering what you are offering or is there something else the people you are targeting would rather do than use your platform? You will need to identify these things.
4. At this point, you are ready to clearly define your unique value proposition. Your unique value proposition is what your offering has that makes it different from that of your competition. It is what makes your offering attractive to your audience and it must be important enough to them to get and retain their attention.
Let’s say there is another platform offering what you are offering but the platform is unorganized, takes a long time to load and generally doesn’t have a large enough database to satisfy the inquiries of the people in your target market and the people using this service considers it a big inconvenience (and you know this because you actually asked the people using the product), with this knowledge, you can build your platform in a way that ensures that anyone using your platform won’t experience these challenges and “ that” would be your unique value proposition.
5. The next thing to do at this point will be to identify how you intend to make money from this platform you are planning to build. Will you ask the people using the platform to get the information they need to pay or will you make money from advertisement? Are there other products you can sell to the people that visit your platform? You will need to identify these things.
6. At this point, you will then need to figure out how you will get the people in your target market to know about your platform. This is key. The success of your platform is greatly contingent on how well you execute this step. You won’t be in business for long if enough people don’t know you exist. You will need to identify where the largest number of the people that look like your Ideal Client Avatar can be found. Is it online, say Facebook or is it offline, say at seminars, fireside chats, and conferences? Or both?
it is also important to stay flexible about the idea of who needs your platform ‘cause you might find that there are other people who might need your platform that you didn’t consider at first.
7. Now you are ready to prepare your financials. This is a set of projections outlining your expenses, your revenue, your cash flow, your projected income, your sales forecast, your projected balance sheet and your break even analysis. You might need to ask for help from an accountant if you do not understand finance. (You should be good with numbers, though. At least good enough to understand what these terms mean)
8. After preparing your financials, you will need to set your goals for your business and identify how you intend to measure these goals. These goals could be in terms of how much revenue you want to make per month or how many visitors you want to visit your platform per month or brand awareness. You could measure these goal using metrics such as Customer Retention rate, Churn rate or using social media metrics (The metrics you’ll use will be dependent on what your goals are and on what is most important to you about your business.)
9. This is the last step and it is the point where you identify who will do what. You identify who would work with you on building your platform and then you define their roles. This is also very important and voila! Your plan is ready!
N/B: it is important to note that this is a summary of a business plan and should not be substituted for the actual fleshed out version.
This is just to get you started.