You have an idea for a product or service. You’ve run it by your peers, done a little market research, and determined that it’s an idea worth running with. What’s the next step? How do you take an idea and turn it into an actual money-making business? By writing a business plan.
I’m not talking about putting together a formal business plan. Depending on your situation (i.e. you need funding), a comprehensive business plan might ultimately be the way to go, but what I’ve laid out in this article is simply a series of questions designed to help you think through some of the finer points of your idea that you might not have considered before.
I call them the 5 W’s for writing a business plan.
Before we dive in, I want to mention one thing: don’t expect to answer all of these questions in the time it takes you to read this article. If you do, you’ll be setting yourself up for failure.
I’m going to take a wild guess that one of your primary business goals is to get people to buy what you’re selling. Right? Whether you’re selling a service or a product, on the other side of that transaction is a person who’s going to hand you money.
But who is that person? Have you identified your ideal client or target market? Ever thought about creating customer personas?
One of the first things you should do before you launch your business is determine who your ideal customers are. These are the people who will ultimately make or break your business, so take the time to figure out who it is you want to serve. Your ideal customers will be those who energize you (not suck the life out of you), people you’re excited to help (not roll your eyes when they email you), people who inspire you.
Once you spend some time figuring out who your ideal customer is, you’ll have a much easier time finding them.
“A primary reason that many service professionals fail to build thriving businesses it that they struggle to articulate — in a clear and compelling way — exactly what solutions and benefits they offer.” ~ Michael Port, Book Yourself Solid
Imagine you’re at a party and you’re introduced to someone new. After exchanging names, you’ll likely be asked, “What do you do?” Do you have a good answer?
When I answer that I’m a web developer, people’s eyes start to glaze over and they’re probably sorry they asked. What if instead I answered, “I help small brick-and-mortar retailers establish themselves online by creating websites and training them how to use social media.”
That’s a much better answer, right? I’ve stated exactly who it is I serve, what service I offer, and how I go about it.
What is it you offer?
In addition to determining what you offer, I’ve found it helpful to think through the things that you don’t offer. Your “non-offerings” are typically ancillary (i.e. I help people set up their website, I do not help them configure their email or offer general tech support). You don’t necessarily have to communicate these non-offerings out loud, but having those mental boundary lines around your offering will help you know when to say yes (or no) to opportunities.
I know from experience that the “fun” part of starting up a business is the creative process of refining your idea and day-dreaming about what you could do. The hard part is when you have to work through the drudgery of filling out paperwork, researching vendors, and doing those hundreds of little tasks you don’t want to do but need to do in order to get your business idea out of your head and into reality.
That stuff can take the wind out of your sails and bring you to a dead halt if you’re not careful. How do you get past it?
Say it out loud and write it down. Setting deadlines (and telling someone else that deadline exists) is a strong motivator for getting things done. Set realistic milestones and get after them.
Another trap of launching something new is the feeling that every. little. thing. must be perfect.
As much as you want that, don’t let perfection stop you from getting to market. Launch sooner rather than later — it’s OK if everything isn’t 100-percent perfect (or even 100-percent) done.
After launching, you can continue to refine. Put follow-up dates on your calendar to review how things are going and make any necessary adjustments.
Need a breather after all that we’ve talked about so far? This is it.
Deciding where you’ll sell your products or services is not as mentally taxing as deciding who your target audience is and what you’ll sell them. At the risk of oversimplification, there are two places you can sell:
For both of those places, you have the additional options of selling:
- On your property
- On someone else’s
For example, you could sell from your own website (online, on your property) or you could sell on Etsy (online, on someone else’s property). Or you might sell from both.
You might think I’m being ridiculously obvious, but the “where” is extremely important to think through. Your decision here will trigger a whole series of new decisions, such as do I need a credit card processor, how do I get a website, or who do I talk to about building inspections.
Owning and operating a business takes serious commitment. There will be days you’re exhausted, days you’re frustrated, and days you’re stressed to the max. What makes you want to get out of bed on those mornings and go to work?
That’s your “why.”
Your why is that overarching factor that drives what you do. It may be directly related to your products or services. Or maybe your products and services are just the means to an end.
“There are only two ways to influence human behavior: you can manipulate it or you can inspire it.” ~ Simon Sinek, Start With Why
I recently read Simon Sinek’s book Start With Why and the premise is that customers are attracted to WHY we do what we do, not WHAT we do. It’s an excellent book and I highly recommend it.
TOMS shoes is a perfect example of this. Their “what” is selling shoes. Their “why” is to improve lives by helping people in need. That’s compelling and attractive. Even if their shoes aren’t the best, I’ll still give them my business because I believe in what they’re doing.
When you know your why, you can attract customers that understand and believe in your why.
Put the 5 W’s to work in writing a business plan
Are you wheels turning? I hope so. Thinking through your who, what, when, where and why may not be the most fun part of writing a business plan, but don’t skip the answers. I can guarantee your business will be better for it.
Also published on Medium.