In my previous posting (Why You Need a Written Description of Your Business (Part 1)) I told why, in my opinion, you need a written description of your business as early as possible in the dream or kick-off stage of the development of your business. I also introduced the outline of a template that you can use to develop your first written business summary.
In this post we will cover some of the details of how to complete three of the thirteen sections outlined in the previous post.
The first thing (and often the only thing!) many new entrepreneurs want to talk about is their product or service. However, when working with clients in extracting and developing the information for their first business summary, I start with the Market Opportunity/Problem.
The business idea you have should address some market need. This is usually defined as a problem that you can solve or an opportunity that you can take advantage of. I prefer, if possible, to spin the market need as an opportunity versus a problem, as opportunity is a more positive statement/view of the market need. The inclusion of third-party support – statistics, quotes, etc. – to your understanding of the market need is important in showing that this opportunity/problem is real.
For example, I have a client that is introducing a paradigm shift in how people learn to read. The problem is enormous, so we opened the market need section with a quote:
“Americans should have been stunned when the National Assessment of Adult Literacy (NAAL) … revealed that a staggering 30 million American adults scored at ‘below basic’ — meaning they could perform no more than the most rudimentary literacy tasks. Another 63 million adults could perform only simple, basic everyday literacy activities … some 93 million lack literacy at a level needed to enroll in the post-secondary education or job training that current and future jobs require.”
Of course we footnoted where this quote came from and included the internet link to the online version of the report.
Remember, don’t get overwhelmed. If all you can do is define a question (or a series of questions) regarding what you need to find out then you have made a start. Of course, the next step is to find the resources that have the information you need.
After you have written your Market Opportunity/Problem section, then you can move on to the Our Solution section, where you will describe your products/services and how they resolve the market problem or take advantage of the market opportunity.
In theory, this should be the simplest section for you to write. But if you haven’t previously written anything about your product/service then writing this section can be an exploration into areas that you haven’t fully considered before. This may lead to time spent evaluating and clarifying what is, and what is not, part of your business solution.
From your work on these two sections you should also be able to create an ‘elevator pitch’ – i.e., how you introduce your business to someone for the first time. Remember, an ‘elevator pitch’ is so called because it should be short enough that you can present it in the time it takes to ride an elevator a few floors. Also, it should leave the recipient wanting to hear more; so, when you give your elevator pitch, pause afterwards and let the listener take it in and, preferably, ask you a question – don’t just drone on!!
The next section to work on is the Business Model section. In this section you describe how you are going to monetize your solution. Include how are you going to productize your solution and any phased implementation that you are planning. If you already have specific price points in mind you can include those, but most of you probably will not.
This section is not just about how you are going to directly generate revenue selling product. For example, your business model may include a website providing a version of your product for free, as a way of generating interest and getting people started on the path of moving to a pay version with ‘premium’ features. Additionally, in our example, you may be selling advertising on your web site, which generates revenue but isn’t part of your product/service solution set.
One last general tip for this post. Err on the side of writing too much versus too little while you are drafting your document – you can always edit it down to produce a summary at a later time. That way you don’t, at this stage, leave things out that really should be covered.
In the next post we’ll cover Markets & Channels, Competition, and Our Advantages. Let me know if this information is helpful to you.