Why you need to start thinking about the business side of your project more than you already are.
One of the afflictions that entrepreneurs suffer from is the “if you build it they will come” sentiment. Naturally, we think our own ideas are great, and of course, since we think they’re great, everyone will want what we're trying to sell them. Built into our minds is the urban legend of success stories: someone releases a product, people start liking it, it gets rave reviews, and it takes off. All they had to do was code a great product, and it just "took off from there." They make millions and live happily ever after as a snarky VC/ tech blogger.
Unfortunately, the reality for many people is exactly the opposite of that. They release something and one or two people check it out. If they write a post about their release in their favorite forum they will probably get a few more people to take a look. Eventually, after much longer than they ever thought, they get their first sale.
For most people then, what sinks in after release are four things:
1. not everyone thinks your idea is as exciting as you do;
2. you’re going to have to adjust your expectations if you’re to survive;
3. its more work than you thought, and;
4. its going to take a lot more time to make money.
I’m not trying to be depressing as much as trying to make a point. These four things have something in common with the idea of a business plan. Each one can be affected by thinking about how your business will work.
I’m not saying everyone needs to write a plan. There are a many people more knowledgeable than me on both sides of the fence on this issue. Write one, don’t write one, build it first, think about it later vs. think about it now so it can be built better later. Its all over the place. In my view, the business side of things warrants a good amount of thinking time.
I personally do not write out business plans in the format of an actual plan. I do write down a lot of notes about the subjects that business plans cover so I don’t forget my information, but I never actually end up formatting them into a plan. I do most of the “writing” in my head. What you chose to do is up to you.
The important part is to think about the business aspects of your product and not just the technological or coding side of it. Things like how much it should cost, who will buy it, how they will find out about you, what your competitors do, will someone need it besides you? (seriously). All of those things can change how you succeed.
I recommend that anyone out there that is considering starting a business should read some business plans. Especially if you have no business knowledge. Just reading about how people have gathered and interpreted information gives you a better idea how you should gather or interpret the information you have. Even if the businesses aren’t similar, the ideas are often the same.
The reason this post is titled “The business plan in your head” is because no matter if you write it down or only keep it in your head, you should take the time to think through certain aspects of your idea. Too many times developers just think about what they can do with code and not what they can do with the finished product.
Lets take a look at that list again, and see how thinking about your business makes a difference.
1. Not everyone thinks your idea is as exciting as you do.
- finding out who does think your idea is exciting and selling to them specifically can make a difference.
2. You’re going to have to adjust your expectations if you’re to survive;
- your research gives you a clue what those expectations should be. It can even give you ideas to explore new markets and what those expectations should be.
3. Its more work than you thought;
- you’d already know this because you’ve just done the work.
4. Its going to take a lot more time to make money.
- realistic expectations from hard numbers is better than conjecture. Having targets backed up by realistic data can help you measure your success, or let you know when to let an idea go.
There are too many resources about business plans to list here. You find many of them via Google, and many sites have ideas about ways to think about each aspect of your business. I personally recommend visiting www.inc.com or reading through old copies of Inc Magazine at the library to get knowledge about business basics.
Comments