A Great Business Plan Begins With Engaging the Customer
Learn how to invest your IRA or 401k into a franchise penalty-free. ($50k min)
When launching a new business, relying too heavily on the details of your business plan can actually lead to failure.
The research that goes into formulating the business plans that I typically see comes from sources such as industry reports, census data and other government-generated historical material, plus articles from business periodicals.
What these plans lack is information gained from dealing with actual customers.
Entrepreneurs need to spend much less time at their computer imagining their new business and more time out engaging with real, live customers.
A good bootstrapping startup strategy is to start small and start simple. Take that initial idea and see how the market reacts. Use real customers to test the assumptions of your business model. Adapt, based on what you learn.
Sierra Jacobson, an alumna of Belmont University's entrepreneurship program, launched her fashion business, Sierra Jacobson LLC, shortly after graduation. Her original business model was to have fashion consultation as her main activity.
She planned to publish a magazine called The Lookbook and blog as a supporting promotional activity for her fashion consulting services.
Jacobson launched the business by creating fliers and promotional materials advertising fashion consultation work. She placed these ads in stores, coffee shops, and other local businesses. She also sent personal letters and business cards to friends, family and anyone she could think of to garner support.
But even with all of these efforts, she didn't hear anything back. The market had given her a clear message about her original business model.
Not ready to give up, she continued to work on the magazine, hoping that the advertisements within the publication would help her build the fashion consulting side.
"During the time that I was shooting and designing the layout for the magazine, I was also out seeking advertisers to be a part of the publication," said Jacobson. "As I met with various local businesses, I began to see that people were excited about the idea of a fashion magazine for Nashville."
Jacobson changed her business model based on the information she got from engaging customers in the market.
"The main goal is still the same, to provide Nashville with fashion-forward information and advice," observes Jacobson, "but the medium for providing this information has changed.
"I began with an idea to work one-on-one with people in a fashion consulting capacity and have now found a way to reach many more people through a published and electronic magazine with The Lookbook."
By engaging the market early in the development of a new business idea, and listening to what real customers have to say, you have a much better chance of success.
More from Business Insider
For reprints and licensing questions, click here.