By Paula Fleming
So, you want to start a business, or maybe you already have one. When it comes to trying something new, you’re probably one of the first among your friends to take a risk. Ideas come naturally to you.
Being full of energy and ideas is great, yet it can also be a double-edged sword for some entrepreneurs. On the positive side, you possess the initiative to soar over hurdles that many small business owners run into at every turn. But on the flip side, what happens when you don’t pay enough attention to the challenges you’re jumping over? You might be missing out on a key piece of data: will your ideas actually work?
The Business Model Canvas is a tool that small businesses can use to make sure they’re assessing key business situations and applying the right solutions to them. The template defines 9 key categories (including 9 key questions) that every small business should be able to answer about their product or service. It takes into account every piece of a well-functioning, growing business, so it’s no wonder that the canvas has become a global standard for business planning.
If you’re ready to translate your ideas into your business, here’s what you’ll need to be able to answer:
You need to know the answer to: “Who are my customers? But really… who are my customers?”
Don’t fall into the trap of thinking every parent, millennial, senior, toddler, etc. will be in your target market. You’ll need to know the specifics of who you’re selling to. That means that your business should be focused on, say, 6-8 year-olds who are the youngest sibling and who play soccer, rather than marketing broadly to kids in elementary school.
By segmenting your market this specifically, you’ll be able to think as if you’re a member of the target audience, and you’ll get a better sense of what they want from you.
You need to know the answer to: “What are my customers going to gain from this? What will be their favorite part?”
If you’re starting a business or launching a new product, you can probably tout more than one dozen benefits of your product or service. The problem is, that won’t be enough to get you in the door with most customers. You should define the primary value that you’ll bring to your customers.
This primary value should become the focus of your first several months or years in business. Focus on other benefits only once you know you can solve your customers’ most important wants and needs first.
You need to know the answer to: “How will my customers find out about my business?”
Once you know who your customers are, you should find out how to speak to them. What media are they looking at on a daily basis? What attracts them in advertising? Do they respond better to specific types of images?
Your research here is important. There’s no sense in selling a dog toy to someone who doesn’t own a pet.
You need to know the answer to: “What kind of customer service do I provide?”
Your business might offer one-on-one support for every customer, or you may personalize every product you sell. On the other hand, you may mass-produce the same thing for every customer. You could even do a mixture of both. You’ll need to decide on the level of customer service and personalization you’ll provide.
In getting your business off the ground, you may choose to start with a different customer experience than you intend to master later on. The trick is to find a level of customer support that will get your business off the ground without exhausting all of your resources.
You need to know the answer to: “How will I make money?”
This question is something that you’ve probably already asked yourself, and for good reason. If you don’t ask this question, then you’re probably not going to have a very successful business.
Explore every benefit of your product, and speak to your customers about what they would be willing to pay for. You may be surprised by how many people are willing to pay for their problems to be solved.
You need to know the answer to: “How will I succeed?” (Part 1)
You’ve got the fundamentals of your business. You know what you’ll do, and who you’ll do it for. Now how will you get there?
Don’t mistake your business strategies with a to-do list; sending an email is not a long-term vision. Instead, consider the long-term, high-level activities that will make you successful. Is that to have an amazing dining experience at your new restaurant, or to maintain a stellar Instagram? Make sure that your strategies are intimately related with the core value of your business.
You need to know the answer to: “How will I succeed?” (Part 2)
It’s no secret that you’ll need both human and physical resources to succeed in business, and you’ll need to plan for those. What assets will you need in order to get off the ground? Does your restaurant need a wait staff? Does your toy company need a 3D printer?
When planning your key resources, keep in mind all of the crucial assets that will help make you successful and different from your competition.
You need to know the answer to: “Who will help me get there?”
No business can be built alone, even if you’re a solo-entrepreneur. You should look to get a team on your side, whether that’s a small business accountant, a freelance graphic designer, a business coach, or an investor.
Consider who can provide the skillsets that you lack and who can provide – or connect you to – the key resources that you need. Those are the key partners that you’ll need on your side.
You need to know the answer to: “How much am I going to spend?”
Understanding your costs is an important part of running a business, and you’ll need to make sure that your business doesn’t cost you more money than you make… at least in the long run.
You should be able to tie your investments to the value proposition that you offer your customers. If your investment isn’t directly contributing to that primary value, you may want to table it for later. Pay close attention whether your costs are needed (fixed) or flexible (variable).
Every business needs a strong business plan, whether launching for the first time or introducing a 10th product. Use the Business Model Canvas to make sure that your idea is sound.
(Paula Fleming is Chief Marketing & Sales Officer at Better Business Bureau Boston.)