Building a viable business requires great planning, consistent execution, some trial and error, and a strong understanding of your marketplace. This document provides a complete framework from concept to venture, breaking the process into seven steps for aspiring entrepreneurs.

Step 1: The Idea and Validation (The Base)

Every business stems from an idea, however a business that produces, or sells something, is a viable business if you can validate the problem. In the process of launching a business, this step gives you the foundation to ensure you are solving a legitimate, painful problem in the marketplace.

1. Identify a Problem

not a Product The most successful businesses provide solutions to a painful problem for their customer base. Don’t “fall in love” with your solution; fall in love with the problem you are solving.

Some questions to ask yourself: “What do people complain about?” “What are some tedious or inefficient tasks?” “What is something we know is missing in this market?”

Need vs Want: Is your ‘must-have’ problem (a need) or a ‘nice to have’ problem (a want). Need problems tend to create urgency and more willingness to pay.

2. Performing Market Research and Defining

a Niche As soon as you have a need, then you need to be clear on what else is around.

Competitive Analysis: Who else is addressing this need? How? What are their shortcomings? Your business should have a unique selling proposition (USP) that makes it clear how you are different and better!

Target Audience: Define your ideal customer, or avatar. Know their demographics, psychographics, pain points, habits, and where your audience holds sway in the information world. A tightly defined niche audience is easier to move towards than an amorphous general market.

Validation: Prior to spending real money, be sure to validate the concept! Talking to your target audience is an important catalyst here. Will they actually pay for this? You can leverage surveys, landing pages to gauge interest, or simply create a Minimum Viable Product (MVP) to evaluate interest!

3. Build a Unique Value Proposition (UVP)

Your unique value proposition is a clear statement that explains what benefit or advantage you offer, how it provides an alleviate to the client’s challenges or needs, and what you do differently from other competing businesses. You want it clear, compelling with the reader a clear understanding right away!

Stage 2: Strategic Planning (The Blueprint)

The strategic plan is your blueprint, often considered a business plan, as it captures your route and your goals, estimates your financial future, and states how you will operate.

1. Writing the Business Plan

While the business plan is often seen as a formal document, the act of writing the plan will force you to answer important questions about your viability. A business plan is organized into sections:

Executive Summary – provides an overview of the entire business plan.

Company Overview – gives what your business is, a mission statement, and a state or federal organization designation (Sole Proprietorship, LLC, Corporation, etc.).

Products/Services – describes what product or services you will offer and pricing.

Market Analysis – provides information about your industry, identified target market, and competition.

Marketing and Sales Strategy – shows how you will communicate with a customer and convert them into sales.

Financial Projections – estimates start-up costs, projected profit and loss, cashflow statement, and break-even analysis. The Financial Projections will be the most valuable part of the business plan for securing funding and measuring success.

2. Legal Structure and Compliance

Selecting a legal structure is important for liability protection and tax purposes. You should discuss with a legal professional to select the proper legal structure. The crucial compliance steps are:

Registration – Registration of your business name (DBA/Trade Name).

Taxes – Obtain tax ID’s (e.g., EIN in the US).

Licensing and Permits – Research and obtain any local, state, and federal licenses needed to operate legally in your specific business space.

Intellectual Property – Protect your brand, ideas, and inventions (e.g. trademarks, patents, copyrights).

3. Sourcing Funding

Identify how much capital you will need to get started. Your funding sources may differ.

Bootstrapping – Using savings and revenue generated by the business (most common method for small business funding).

Friends and Family – Usually the first external investors.

Small Business Loans – Bank loans or microloans.

Angel Investors or Venture Capital – If you have a business with high growth potential, trade equity for funding.

Crowdfunding – Using sites such as Kickstarter or Indiegogo.

Stage 3: Product/Service Creation and Operations

This is the stage when the idea is shaped into its physical form or even digital form and the systems to deliver the product/service, if not imagined yet, are put in place.

1. Minimum Viable Product (MVP)

Instead of waiting to have a perfect product, you should launch the MVP, which is the simplest version of your product/service that delivers core value.

Objective: The MVP is a tool for learning. Launch quickly and get in the hands of real customers, collect your feedback and rapidly iterate (build, measure, learn).

2. Creating Operations

Create the processes that will enable the business to run in an efficient manner.

Supply Chain/Sourcing: How do you obtain the raw materials (or resources) needed to make your offering? Negotiate, early and often, attractive terms with vendors you would consider reliable.

Tech Stack: Tools you will use for communication (e.g., Zoom, Slack), sales (e.g., Shopify, WooCommerce), hosting your website, project management (e.g., Monday, Asana), and accounting (e.g., QuickBooks, Xero).

Customer Service: Define how you handle inquiries, complaints, and support. A great customer service experience can become a key differentiator.

3. Financial System

Set the necessary and well-founded financial systems to manage money immediately.

Bank accounts: Separate your personal accounts and business accounts immediately.

Accounting Software: At a minimum, keep things straight and in one place, utilize the software of your choosing (e.g., QuickBooks, or Xero, or one of many accounting systems) to organize income, expenses and reporting of taxes

Invoicing and Payments: Create a secure and professional way of getting paid whenever possible. (e.g., Stripe, Square, PayPal)

Stage 4: Marketing, Sales, and Growth

An excellent product with no customers is nothing more than a hobby. At this stage, the marketing, sales, and growth functions are focused on acquiring, retaining, and growing your customer base.

1. Developing the Marketing Strategy

Your marketing plan moves your unique value proposition (UVP) in front of your target audience.

Digital Presence: You cannot underestimate the importance of creating a professional website (no further debate). You will also want to build content that provides value and attracts your ideal customer (Content Marketing, e.g., blog post, video, social media, to name a few).

Search Engine Optimization (SEO): Be sure your website will be found by a consumer searching for your product or service.

Paid Advertising: You can pay (ad strategically) for Google Ads or social media advertising to simply target your specific audience.

Public Relations (PR): You will want to seek media coverage; credibility and awareness are appealing attributes to the press.

2. The Sales Process

Define the steps your prospect needs to go through to become a paying customer (the sales funnel).

Lead Generation: How are you going to attract that initial interest (e.g., signing up for an email, free consult)?

Conversion: What is the specific action a customer takes to actually buy? Be sure this is simple to do, feels trustworthy, and is seamless.

Pricing Strategy: Your pricing strategy needs to cover the cost for the product or service to be produced, reflect the value being delivered, and be priced competitively.

3. Measuring Key Performance Indicators (KPIs)

You cannot improve what you don’t measure. You will want to look at KPIs (signals of growth) like the following:

Customer Acquisition Cost (CAC): How much does it cost to

Stage 5: Team Development (The Engine)

You cannot grow on your own. Eventually, you are going to have to delegate and build outs a talented team.

1. Hiring Strategy

The first hires will be critical to your company’s culture during the first years of business.

Hire for Culture Fit and Competency: Look for people who understand your mission and can do what you can’t.

Clear Role Definition: Take the time to write thorough job descriptions and clearly define Key responsibilities and key performance indicators.

Consider First Adding Freelancers Then Documenting Processes Instead: Instead of hiring full-time individuals, consider outsourcing/jumping into freelancing for non-core tasks that keep you out of court or legal trouble (ex. graphic designer bookkeeping).

2. Building Culture

Culture insight is not a list of perks. Culture insight comes from how decisions are made and how people treat each other.

Mission Oriented: Each employee understands and believes in the company’s mission

Autonomy with Trust: Allow employees a little trust with their work.

Feedback Loop: Build a system to provide feedback along with performance reviews and support.

Stage 6: Scaling and Optimization

Now that you found success, the company needs to focus on scaling operations efficiently.

1. Systems and Automation

Scaling is doing more business to more business with the same or less resources.

Process Documentation: Write down every routine task (A “playbook”.) This will simplify thorough training for any new employees you may hire, allowing you and your team to not do legal related business that you may be invited to court over.

2. Diversifying Offerings

Look for avenues for commonsense growth:

Product Line Extension: Add related products or services.

Geographic Expansion: Enter new markets.

Strategic Partnerships: Collaborate with other businesses to attain broader reach or shared services

3. Financial Discipline

Growth costs money. Hold your finances tightly

Budgeting: Always measure actual performance against your budget.

Contingency Planning: Always leave some cushion to prepare for both adverse events and opportunities that appear.

Profit First: Focus on profitability, not just revenue. High revenue with low profits is not sustainable.

Stage 7: Adaptability and Long Term Planning

No market stagnation exists. Successful businesses are built to weather change and adapt.

1. Listen Carefully

Customer Feedback: Seek out and listen to your customers. The market will tell you what it wants and deserves

Stay with it: Continue to watch the industry, technology and competitors. Complacency is the slow death of an enterprise.

2. Emphasizing the Importance of Innovation

Make it a priority to spend time and resources in research and development. Innovation does not necessarily have to be a new product. It can be a new process, new customer experience, or simply a new way of doing business.

3. Confirming the Exit Strategy (Optional)

This might seem a bit early, but thinking about your ultimate goal for the business, whether that means passing it on to family, selling it or creating an IPO (initial public offering) in the future, should dictate decisions today. It also matters, because, for any exit, a well-constructed business with established processes and sound financials is always going to have more value and better potential outcomes.

Conclusion

Building a business is a lot of intentionality, learning and competition. It typically proceeds, beginning with an idea that you have learned to validate, then creating established systems, having a team in hand, and finally learning to pivot with market forces. Embrace failure as an opportunity for learning and stay obsessed with solving your customers’ problems. In the end, you are not just building a company; you are building an asset, that will create sustainable value. It can be a challenge, but the satisfaction of a realized vision and constructing something that will persist is very rewarding.