If you were to spend time and money earning a business degree, you may be required to create a fifty-page business plan that describes every minor detail of your theoretical business before you graduate. Universities cannot make starting a business a requirement, so they will ask you to describe your theoretical business in great detail instead. Creating a lengthy business plan may be a useful academic exercise, but it is not useful when trying to 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 their first contact with actual customers. As you become more familiar with your market and start working on your product, significant portions of your business plan may change in order to accommodate the realities of your target market. Do not spend a large amount of time writing down the specific details of a business plan in lieu of actually working on your business.
Building an Audience Is Not Building a Business
While some people put too much focus on creating a business plan before starting, others make the mistake of having no plan at all. These people will start writing a blog or publishing a podcast without any real plan to create revenue. Blogs and podcasts are best used as marketing tools that will help attract people to your message, but having an audience does not mean that you have a business. Having an audience just means that you can start a conversation online 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 so you can generate revenue. If your goal is to create a profitable company, you need to be selling something to somebody. Do not mistake having an audience for having a business.
Creating Your Business Model
In lieu of creating an extended business plan or not creating a plan at all, I recommend creating a one-to-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 process how you communicate what your business does to others. In this document, you should:
- Describe your potential target markets.
- Describe your product or service with attention to its features, benefits, and customer solutions.
- Discuss product marketing and initial marketing channels you plan to use to acquire customers.
- Outline your delivery process: which people, skills, equipment and software do you need to provide your product or service to your customer?
- Include a rough estimate of your company’s finances based on product pricing and estimated expenses in the first year.
- Know how many customers you will need to have to break even.
Completing this short document will ensure that you have a starting point for every major component of your business.
- Identify your current mode: are you building a business model or just an online presence and audience?
- Create your business model document.
- Make sure the components of your business model are clearly articulated: target market, product or service, marketing strategy, pricing, and methods of delivery.