Want to start your own side-hustle business? Thinking about launching a new product line in your corporation? Both projects have the same steps.
Get a basic business plan together
Years ago, it was popular to have 30 page business plans that spelled out endless detail. Today’s thinking is to use “Lean Methodology” to start working through some of the issues with your business. These techniques were developed for startup companies, but just make common sense for everyone.
One great tool is the Business Model Canvas. This tool helps you think through the business issues.
It is really tempting to get started designing your product or service. However, the single most important issue is whether someone wants to buy it. You can do a lot of market testing prior to building your product – and you are likely to learn much more than you expect.
I like the idea of testing and refining the marketing message before putting much effort into the product. Entrepreneurs typically want to do the “fun” part first: build the product. But what good is all that effort if nobody is going to buy it?
Tools like the Business Model Canvas help you uncover questions that need validation. Write down every question that comes up and keep a list.
It is absolutely critical that you do not ignore any unanswered question. You know what they are – they are the questions you do not want to face. As an angel investor, if I ask a question and I get the response “oh, that is the easy part,” I know the entrepreneurs I touched on the entrepreneur’s deepest fear and that they have blown it off.
If I ask that same question and I get “here’s my game plan to test, understand, and refine that issue…” then I know they are on the right track.
Think about your business step by step
Write down every question you have about your business and keep a list. A typical list will include designing and testing the product, figuring out the marketing messages, identifying the customers, working on the distribution network, pricing the product or service, putting together the administrative back end to run the business, and those types of topics.
Rather than jump feet-first into the business, try to prioritize the issues that appear hardest. The hardest issues are typically the ones that you are consciously or unconsciously avoiding. Harder issues also can have the biggest impact on your business in the long run, and by solving them first, you move your company farther faster.
As you start with your list of questions that need answers, you can put together mini-plans for how you are going to answer the questions. For example, to test the marketing messages, you might do a landing page and run some paid ads against it to gauge interest level. For each of these steps, you can allocate time and money. This will give you a roadmap of your efforts, the money you need in the short term, and decision points for evaluating whether or not this is a good business idea.
This process is appropriate for a side-hustle business where you are keeping your day job, but it is also appropriate for a business owner who is thinking of expanding your product line, for example. A business owner might have different people working on each question needed to be answered for the product launch. For example, they may have their marketing expert put together and test a marketing message, while the engineering and supply chain people work out the costing and engineering details.
Either way, the same sequence of questions and tests need to be run.
Be creative – hack the startup funding system
It is easy to think that you need to outsource a bunch of work and that it will cost a lot of money. That is not true. You were creative enough to come up with the idea – and you can be creative enough to execute it.
There are countless inventors and entrepreneurs who do not have the technical skills to build a product. They have a great idea, but they get stuck because they think they need to spend $250,000 with an engineering firm to build a prototype app – then they can figure out if it sells. This is a bad strategy.
A non-technical founder can do almost everything beforehand. They can do market validation by testing messages in blog posts, landing pages, and the like. They can create wireframes of the app and validate them with potential customers.
The sad truth is that many founders give up when it feels hard. There are always questions about the business that can be run down and solved.
The more investigation you do ahead of time – especially the things you can do without spending huge money – the more you will learn about your product, your customers, and your potential. Virtually every company pivots as they grow and learn.
Nobody wants your product – they want the result
There is a famous phrase that people do not want a 1/4 inch drill: they want a 1/4 inch hole.
Customers do not want your skin cream: they want the experience of luxury. Customers do not want your cell phone app: they want the way the app makes their life better.
Focus on what the customer is getting from the purchase, not what it costs you or how your company benefit.
Keep moving forward
The most terrifying – and most rewarding – part of being an entrepreneur is being on a journey where you do not know where you are going. Being an entrepreneur is like wondering through a dense forest at night with the tiniest flashlight.
Entrepreneurs have a “nose” for knowing that there is something out there in the dark, and they keep searching for it. They can be relentless on that search.
Remember, however, that the journey is far more important than the goal. Embrace the uncertainty of it all, learn to live with that constant unease, and let it move you forward.