Chapter 6. The business plan Flashcards
when action and planning face off the winner is…
action
The best way your customers can help besides purchasing is
Referring to others
A marketable idea doesn’t have to be ground breaking but it does have to be…
Useful, it should be useful in solving a problem to the point that people are willing to pay for it
the Seven steps to instant market testing
- care about problem your solving
- make sure market is big enough
- Sell to someone who knows they have a problem, don’t convince them they need your solution
- almost everything is based on deep pain or luxury, either something you want or want to get rid of
- your solution should be different than other solutions present
- discuss this idea with people in the potential market
- show an outline or free product to a subgroup in the market and gather feedback
seven steps to instant market testing Full steps
- You need to care about the problem you are going to sole, and
there has to be a sizable number of other people who also care
Always remember the lesson of convergence: the way your deg
intersects with what other people value. - Make sure the market is big enough. Test the size by checking the
number and relevancy of Google keywords- the same keywords you
would use if you were trying to find your product. Think about hey
words that people would use to find a solution to a problem. If you
were looking for your own product online but didn’t know it existed
what keywords would you search for? Pay attention to the top and
right sides of the results pages, where the ads are displayed. - Focus on eliminating blatant admitted pain” The product needs to
solve a problem that causes pain that the market knows it has.Its
easier to sell to someone who knows they have a problem and are
convinced they need a solution than it is to persuade someone that
they have a problem that needs solving. - Almost everything that is being sold is for either a deep pain or
a deep desire. For example, people buy luxury items for respect
and status, but on a deeper level they want to be loved. Having
something that removes pain may be more effective than realizing
a desire. You need to show people how you can help remove or
reduce pain. - Always think in terms of solutions. Make sure your solution is different and better. (Note that it doesn’t need to be cheaper-competing
on price is usually a losing proposition.) Is the market frustrated
with the current solution? Being different isn’t enough; differentiation that makes you better is what’s required. There’s no point in
introducing something if the market is already satisfied with the solution-your solution must be different or better. It’s significance,
not size, that matters. - Ask others about the idea but make sure the people you ask are your
potential target market. Others may provide insignificant data and
are therefore biased and uninformed. Therefore, create a persona:
the one person who would benefit the most from your idea. Examine
your whole network-community, friends, family, social networks-and
ask yourself if any of these people match your persona. Take your
idea to this person and discuss it with him or her in detail. This will
get you much more relevant data than talking to just anyone. - Create an outline for what you are doing and show it to a subgroup
of your community. Ask them to test it for free in return for feedback
and confidentiality. As a bonus, the subgroup feels involved and
will act as evangelists. Giving builds trust and value and also gives
you an opportunity to offer the whole solution. Use a blog to build
authority and expertise on a subject. Leave comments on blogs
where your target audience hangs out.
focus on first sale not on competing
overcoming inertia comes first not other businesses
Overview questions
What will you sell?
who will buy it?
how will your business idea help people?
Money payment questions
what will you charge?
How will you get paid?
How else will you make money from this project?
Word spreading questions
how will customers learn about your business?
How can you encourage referrals?
Success questions
The project will be successful when it achieves these metrics:
Number of customers:
Anual net income:
Obstacles for business
Name your number 1 concern:
proposed solution to your number 1 concern:
Name your number 2 concern:
proposed solution to your number 3 concern:
Name your number 3 concern:
proposed solution to your number 3 concern:
A project should have a
dead line
mission statement
a Character statement should only be 140 sords
full 140 character mission statement
Let’s break down the planning process into a very simple exercise:
defining the mission statement for your business (or your business
idea) in 140 characters or less. That is the maximum amount of text
for an update on Twitter and a good natural limit for narrowing down
a concept. It may help to think of the first two characteristics of any
business: a product or service and the group of people who pay for it.
Put the two together and you’ve got a mission statement:
We provide (product or service) for (customers).
As described in Chapter 2, it’s usually better to highlight a core benefit
of your business instead of a descriptive feature. Accordingly, you can
revise the statement a bit to read like this:
We help (customers] do/achieve/other verb [primary benefit).
Focusing like this helps you avoid “corporate speak* and drill down to
the real purpose of the business as it relates to your customers. Here
are a few examples:
If you have a dog-walking service, the feature is “I walk dogs.” The
benefit is “I help busy owners feel at ease about their dogs when they’re
not able to be with them.
If you sell knitted hat patterns, the benefit is something like “I help
people be creative by making a hat for themselves or someone close
to them?
If you make custom wedding stationery, you might say. “I help cou-
ples feel special about their big day by providing them with amazing
invitations.
How about you? What is the 140-character (or less) mission state-
ment of your business idea?
Chapter 6 key points
“Plan as you go” to respond to the changing needs of your custom.
ers but launch your business as soon as possible, with a blas toward
action.
- Nick’s first print sale provided far more motivation than the $50 he
received. As soon as possible, find a way to get your first sale.
• Follow the Seven Steps to Instant Market Testing (or the market be.
fore manufacturing method) to gauge the initial response.
• Use the One-Page Business Plan to outline your business ideas
quickly.
• To avoid overcomplicating things, explain your business with a
140-Character Mission Statement.
