Got a new business idea? Do this before you do (literally) anything else…
I wrote this on my 250th-something day in lockdown (thanks Melbourne) and it had been 2 months since I left my job to focus on starting a new business. It felt like 2 minutes…
Having spoken to a few friends, I know I am not the only one who is feeling a little slow, or, as Adam Grant calls it languishing. No matter how much time-chunking I do, or how many notifications I get from Google to prompt me to move on to my next task — the minutes, hours, days and weeks blur into one big lockdown-y mush.
So I thought a good way to put some markers in would be to start writing some stuff down in the evenings, and capture some of the things I’m learning. Which is a lot. And a lot that I wish I’d learnt before… “To teach is to learn twice”, so this is as much for me as it is for you.
If you find something I write about particularly helpful, let me know and I’ll write more on those topics. If not, there are a million other things you can do.
Yesterday I finished a business plan for 1 of 2 ideas I had for a start-up and through the process, it quickly became clear that I was about 12 months too late to be starting with this particular idea. It didn’t matter, it wasn’t my favourite of the 2 but still, having invested energy, time and brain space it felt frustrating to admit that I had to let it go.
Even though I’ve started a couple of businesses before (some more successful than others) I’ve never actually started with a solid business plan/slide deck. This time I thought I’d see what all the fuss was about and boy do I wish I could go back and re-start the other businesses. Putting together a solid business plan could be the most important thing you do before, literally, anything else.
Before you even think about searching for a domain name — do this:
Once you’ve had your idea for a business, before you go searching for a domain name, or trademark, or type it into Google. Set up a Google slides doc and make a slide for each of the following and fill it with clear, concise, realistic research:
- Your idea in one sentence
- Why you think it’s really important
- Problems you have identified
- Solutions that your idea creates
- Market opportunities (Is it a growing market? Where are the gaps?)
- Total addressable market (TAM) (How many people do you think your idea could be relevant to?
- Costs to set it up and keep it running (Industry CPA, marketing costs, set-up costs: are the margins there? What does a 3 year annual forecast look like?)
- Define the product/service/thing you’re selling — what are your USPs?
- Competitor analysis
The competitor research and analysis bit is the bit that caused me to run into a brick wall last night. As I searched deeper online, I discovered lots of early-stage start-ups doing near-enough the same thing as I had planned to do. And if they hadn’t already started up then they’d just secured a huge round of funding.
It became clear that the market was super competitive and that, with the type of product I was offering, there would be battle for both Google ads and/or shelf space. So, whilst on one hand this proved that it was a good idea, it also showed me that I was just too late to execute it. 🤷♀️
By the way I’ve spent the time making this image, you can tell I’m definitely over it
A business plan will trip you up when and where you need it most, before you get in too deep
Whilst I got tripped up by competitor analysis, I could easily have discovered that there were very few competitors but that my margins weren’t there. Or, maybe there was a really small TAM and therefore not many people to serve.
No matter what type of business you want to set-up, each part of this plan will highlight for you the reality of what it will take to get your business off the ground and making money.
If you can foresee challenges before you even start, you can plan for those challenges, pivoting your business or identifying essential USPs immediately, rather than 6 months down-the-line. If the obstacles look too hard to overcome, then you can do what I did and say a bittersweet farewell to your idea and focus your attention on the next one before you waste any more time or money on it.
Remember that all ideas grow out of other ideas, so don’t let it put you off if one’s a dud.
Don’t use it as an excuse to give up — you’ve just proven something that doesn’t work, which is valuable
If you can tick off each of these sections without any foreseeable challenges, then you can start to get a bit more excited and you can even let yourself have a cheeky search on GoDaddy…
Founder of Gltchs, I write about entrepreneurship, experience design and brain health & performance (and occasionally other things…)