This Checklist Will Turn a Great Idea Into a Successful Business
At MyDomaine, we know how challenging it is to turn your passion into a thriving business. Making that leap of faith takes courage and confidence, but seeing your dreams become a reality is more than worth the effort. One question, however, remains: Where do you begin? How do you transform that small and often simple idea into a profitable company? Well, we want to help. So we partnered with Above the Glass to give young entrepreneurs the knowledge, tools, and the edge to own their working lives. In the first installment of this series, we take you through step one: writing a business plan. Here, the two ATG founders, Heather Serden ((previous investment strategy analyst) and Danielle Yadegar (former fashion editor) guide you through their personal process. Be sure to download their business plan checklist at the end.
When we came up with the idea for Above the Glass, it was just a twinkle in our eyes. We knew there was no approachable and informative place to guide women step by step through the process of starting a business. And of the businesses out there who attempted to do this, no one was doing it well. So on nights and weekends, we started to write all of our ideas down, asking ourselves pivotal questions like what it would look like, who our customer would be, and how we would bring it to life.
By creating our version of a business plan, we were forming the blueprint of what was to come. We had to explore each angle, make sure it was a viable concept and begin to discuss the idea with the outside world. This is a vital first step. You really need to dissect it, ask all the questions, and look at it from every angle during the business plan process so you can truly start turning that nagging idea into a profitable enterprise. Here we break it down so you can get started today.
The premise of every successful business is solving a widespread problem. You have to seriously think about who your target customer is and what their true pain points are. Maybe your business is solving a problem that people don’t even know they have, an improvement on a product that already exists, or something so revolutionary it hasn’t even been thought of yet.
Before we started Above the Glass, we were mostly working with creative and talented women launching technology companies. Many of them were intimidated by the financial and operational component of it. When we looked around we realized that the fear and intimidation surrounding the technical parts of starting a business weren’t just a woman-in-tech problem; they were a universal women problem. So we set out to fix it.
Given our target customer is a woman starting a small- to medium-sized business (which makes up 96% of female-owned businesses), we had to create something that specifically eliminated her pain. What is it about business she finds so intimidating? We thought a lot about how to speak to this woman, how to make this information approachable, and how to brand things in a way that she would want to interact with them.
To do this, we developed an online resource center supplemented with editorial content, live workshops, and one-on-one consulting. By having actual face time with our customers, we began to see exactly what they were looking for and how we could best solve that problem for them. We knew they would be willing to pay money for this because we were receiving multiple email requests from women desperate to start businesses, and forthcoming enough to ask for help.
The Product and Service
Once you decide what the big solution is to your customer’s problem, you need to figure out what form that solution will take. The product is the heart and soul of your business, and whichever product or service you decide to offer will ultimately determine your business model.
Are you selling content? Offering cleaning services? Sourcing cashmere sweaters for distribution in high-end retail brands? You need to think broadly about the industry you are competing in and where specifically within that industry you fit. At Above the Glass, our products are our website, our personal consulting services, our workshops, and some soon-to-be-released, very exciting, top secret stuff.
Do Your Research
The Market Size
The point of business is to make money. So before you pursue that new venture, take time to evaluate what the financial opportunity looks like. The first thing to do when figuring out the potential of the opportunity is to size the market.
Sizing the market means determining the total annual revenues generated by your industry, which is called the "total available market." There are plenty of research databases, such as IBISWorld or Hoovers, that tell you the annual revenue of common industries, but sizing the market can sometimes be more of an art than a science.
Some industries are new, undocumented, or ambiguous with their numbers. It is your job in that situation to find benchmarks and make educated guesses based on your research and first-hand experience in that market.
The Competitive Advantage
You need to do your homework so that you know your competitive landscape. Which other companies are operating in your industry, and how are they addressing customer needs?
Given what your competitors are doing, what is your value proposition? In other words, what do you do better than the rest? Maybe you have access to a discount or a direct source that lets you cut out the middleman and sell at lower prices. Do you have a unique skill or talent that gives you an edge in your business? It could be your superior branding or user interface. Maybe you’re an established or trusted professional who has built-in customers willing to come along for a new ride. Maybe your connections within an industry give you access to the best business partners or customers.
Whatever these factors are, we want to know how you are uniquely positioned within the market to provide some sort of competitive advantage. At Above the Glass, we see our experiences in business school, and with startups and small businesses, as an edge to knowing what it takes to start a business. We also know that we ourselves are our target customer, which allows us to communicate and connect with our customer in a deeper and more authentic way.
The Target Customer
Everything we do at Above the Glass, we do with our target customer in mind. It is so important, before you begin the trajectory of your business, to determine who you are building your business to serve. This determines what you offer, how you communicate with that customer, and basically everything you do as a company. We strongly suggest you test your product with your desired customers before you scale the idea to determine product market fit—the idea that you have built the correct product for the correct target customer. Once you determine that, or refine your product so that it better meets their needs, it is time to aggressively market to them and to scale your business (if so desired). Our target customer is a young to middle-aged creative woman with little-to-no business background, but who has innovative ideas. It is up to us to find that woman and communicate with her in a way that resonates.
In today’s world, there’s a ton of competition for consumer attention, so the last thing you want to do is market blindly. The smartest way to go about this is to find out where and how your target customers spend their time. Investigate your target customer’s behaviors and think about where they are already spending their time. It could be that buying a mailing list and embarking on a direct mail campaign is a great strategy for you;,but know for sure that it is likely to be effective because of data, not just that hunch you have. Market research can be one of the most tedious, but most beneficial steps of launching your company.
One you figure out exactly where your target customer is, and how to reach them, you can start spending your precious marketing dollars to reach them. Is your target customer reading mommy blogs? Watching late-night TV? Trolling Facebook during the lunch hour? Find out which channels they are most engaged with so you know how to grab their attention.
Financial projections can be the most intimidating portion of your business plan. No one really has the perfect answers for their financials—the only thing we can be 100% certain about is that the projections will be wrong.
With that being said, you can probably get a reasonable idea of what the costs may be by doing some research, making some phone calls, and finding out market rates for things like office rent, professional service fees, and salaries.
Only you can determine what you think the demand is going to be for your product, how you will generate cash, and what your projected revenues may look like (again, with some market research). At Above the Glass, we found it very helpful to look at businesses with similar business models and similar target customers, and see what their user traffic and revenues looked like. Since so much of that information is kept private by companies, we had to dig really hard to find information in old news articles, word of mouth, and online databases, such as Alexa.com. What we’re asking for in this section is your best estimate based on your experience, research, and your gut. There are no hard and fast rules, and most of these projections can be changed as your business evolves and you can see what’s really happening.
Something that seriously determines your revenue streams is how much you charge. Sometimes coming up with the perfect price for your product takes trial and error. Also when considering your future revenue streams, think about whether you will have different tiers of pricing for different services, and how that will change the demand for each of those options.
The bottom line is we want you to think through all the facets of your financials so that before you start spending money on rent, or before you ask for someone else to invest in your idea, you have built a strong case for a viable venture that promises great returns.
What business plan tips do you swear by? Share them with us in the comments below!