Flushing Out Your New Business Concept

Building a company can be a daunting challenge. There can be this lull at the beginning after you finally decide that you are going to do it. You start planning; thinking really. You start thinking about all of the things that need to be done and then you suddenly realize that you are woefully under-equipped. You’ve haven’t sold anything since those Girl Scout cookies in the 5th grade. You don’t know a P&L from the S&P and you may not have ever been the boss before. Now you have to find a way to get everything that needs doing done while simultaneously learning how to do all the things you’ve never had to do before. And let’s not forget that you just inherited all the trouble that you used to give your employer!

To say the least, first time entrepreneurs can get crushed under the weight of their own task list, if not physically then emotionally. The early part of the start up phase is challenging for sure. There are still so many loose ends and so many things that remain undecided simply because you have not gotten to them yet. The list of things to get done can seem endless.

One approach would be to ignore the problem and simply get started. Throw caution to the wind and account for business challenges as they arise. Another approach might be to sit down and methodically write a thorough business plan. The first approach is simply foolish and creates risks and obstacles that are just not necessary. The second approach may not be the best thing to do either even though it seems more reasonable. While I would certainly recommend that you create a business plan at some point; most business plans are written for an external audience, such as potential funders. So although the process of gathering the required information for the plan can certainly be educational and is certainly helpful, it can be premature. Even so, many people are in such a hurry to get their venture off the ground that they neglect to fully flush out their business concept.

Even if you have a clear understanding of what you are selling, you might find it useful to create a concept document to help you flush out the execution part of your business. This might include: describing how and to whom you will market your product; how you will handle customer service; what tools you will use for order management and managing customer relationships; how you will generate leads, etc.

A good concept document touches on all aspects of business operations but does not necessarily drill down too deeply. The intent is to make sure that you have thought about all facets of your business venture. It might also be useful to think of this as the rough draft of your business plan for when the time comes.

Your concept document should include at least the following items in its table of contents:

1. A summary of your business concept written in a way that someone with no understanding of you or your business would still be able to understand what you are offering.
2. Objectives of the business and an outline of your success criteria. Be specific. Saying that you want to make “a lot of money” does not give you a realistic target to work towards and will cause your business to lack focus.
3. A description of your market and why they would buy your product/service (i.e. your value proposition). If you do not have a clear understanding of why someone would buy your product or hire you then how can you expect to sell your product or service successfully? Again, be specific.
4. Outline your pricing model. Make sure that you understand what your product or your expertise is worth to your potential customers.
5. A list of action items (things you will be working on next). This is just practical.
6. A development calendar. You have a ton to get done. If you do not find a way to organize your workload and get it on a calendar then you will most likely feel like you are always struggling to get things done. Set reasonable expectations for yourself. Only assume that you will be 50% effective on any given work day. The rest of your time will be filled up making calls, taking calls, answering emails and running errands. It’s all productive time.
7. A description of your future opportunities. This might include an exit strategy or partnerships you will be seeking. It could be an outline of how you will expand your product or service offering over time, etc. This forms the basis of your company’s roadmap and sets direction.
8. Outline your risks. Make sure that you are honest with yourself about all the things that could go wrong. Write them down to make them real. If you do not pay attention to these things then you are not adequately managing your risk and the likelihood that you fail at some level increases dramatically.

And don’t forget to have fun. If you make yourself miserable in your own business then you might as well just get a job. This way you can still be miserable but at least you don’t have to take on the financial and emotional risk personally.