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Below you’ll find an unedited chapter from my upcoming book 40 Rules for Internet Business Success. To receive updates about the book and get a free digital copy of my book in its current form, enter your email address in the sidebar to the right.
If you were to go out and business degree, there’s a strong likelihood that you would be required to create a fifty page business plan that describes every minor detail of your theoretical business before you graduate. Universities can’t actually go out and make you start a business, they ask you to describe a theoretical business in great detail instead. Creating a lengthy business plan may be a useful academic exercise, but probably won’t help you achieve any meaningful business goals in the real world. At best, a lengthy business plan is an unproven theory about how your business could work. Lengthy business plans rarely survive first contact with actual customers. As you become more familiar with your market and start working on your product, there’s a good chance that significant portions of your business plan will need to change in order to accommodate the realities of your target market. Don’t spend a large amount of time writing down a plan of how your business could work in lieu of actually working on your business.
Building an audience isn’t building a business.
While some people put too much focus on creating a business plan before starting, others make the mistake of not having a plan at all. There are people will start writing a blog or publishing a podcast without any real plan to create revenue. Blogs and podcasts are marketing tools that will help attract people to your message, but having an audience doesn’t mean that you have a business. Having an audience just means that you can start a conversation on-line and someone will actually listen to you. In order to have a business, you need to have products and services to sell to your audience and a marketing strategy to get them to buy it. Your customers can be advertisers and your product can be your audience’s attention or your audience can be your customers and you can find some product or service to sell them. If the goal is to create a profitable company, you need to be selling something to somebody. Don’t mistake having an audience for having a business.
Make a business model document.
In lieu of creating an extended business plan or not creating a plan at all, I recommend creating a one or two page document outlining the basic components of your business model. This will help you make sure that you have all of your bases covered and will help you communicate what your business does to others.
In this document, you should:
- Describe the type of people that are going to buy your company’s products and services. In other words, who is your target market?
- Describe the product or service that you’re going to sell to your target market. What are the features and benefits of your product? What problem does it solve for your customers?
- Discuss how you are going to market your product. How is your target market going to know that your product exists? What initial marketing channels do you plan on using to acquire customers?
- Include a basic outline of how you’re going to actually deliver your product or service to your customer. What people, skills, equipment and software do you need to provide your product or service to your customer?
- Include a rough estimate of what your company’s finances are going to look like in the first year. What’s your pricing go to be? What are your expenses going to be? How many customers do you need to get to break even?
Completing this short document will make sure that you have a starting point to work off for every major component of your business, including your target market, your product or service, your marketing strategy, your operations and delivery plan and your company’s finances.