'Just Do It' can be a motto for business startups
Starting a new business doesn’t always mean waiting for a detailed, written business plan. Eric Ries, author of “The Lean Startup,” says a minimum viable product could be enough many business startups.
The Nike slogan, “Just Do It,” appeals to more than exercise enthusiasts. Many would-be business owners are impatient about getting their business startup operational. Many of us who teach entrepreneurship often caution people not to go ahead without a business plan. In reality, there are different ways to start a business, and writing a detailed business plan is most useful when the startup venture is trying to obtain investment or loan financing. Not that business planning isn’t important, but a new operator doesn’t always need to have detailed three-year sales projections and cost estimates.
In his book “The Lean Startup,” Eric Ries makes a convincing case for developing a minimum viable product. Ries suggests the entrepreneur use a minimum viable product to gather consumer comments and needs. He notes how difficult it is for people in focus groups and polls to give an accurate account of what they would really buy before there is an actual item with a price and they can judge if the experience they bought was worth it.
This allows you to change or add features, work out production glitches and service bottlenecks before waiting to go to full production or before renting that storefront you have your eye on. It will allow you to avoid wasting money and enables you to change your cost structure as you go. You will also have an ever-increasing knowledge of the true market for your product or service and of the true costs of providing it. Don’t quit your day job, so to speak, until you develop enough business to meet your income goals. Talking to small business owners, I have found that it is not unusual for some to wait two to five years to begin taking some money out of the business for family living needs.
Another benefit to this approach is that the people you sell your test products to become your early market and you have embarked on your marketing plan early.
Business planning is still necessary, and you can check your local listings for available FastTrac or NxLevel classes, which teach aspiring entrepreneurs how to create, manage and grow a business. The classes will help you discover your true product/service costs, financing needs and marketing plans.
Or, go to Michigan Small Business Technology and Development Center website to search for training classes near you. The Michigan State University Product Center has FastTrac classes, shorter one-topic classes and many other resources for helping businesses see if their idea makes business sense. They can help entrepreneurs test, meet legal requirements and fully develop ideas. The Product Center assists those starting businesses or new lines in the food, agriculture, natural resource (for example, wood) and bio-economy fields.