I remember writing my first business plan back in graduate school. Because I had an entrepreneurial spirit, I had taken a class on using my psychotherapy skills as a consultant. I spent hours putting the business plan together, carefully documenting secondary research, conducting a competitive analysis, and neatly organizing the spreadsheets of costs and projected revenue. The plan was 20+ pages long with all the right sections, including well-thought out mission, vision, and values statements and a time management strategy.
My professor told me I had one of the best business plans in all the classes he had taught and I felt confident I could do anything.
What I didn’t know then is that his compliment and my confidence were the biggest undoings of my future success.
Because although my business plan had all the “right” information, it had very little about the hearts and minds of the people and organizations I wanted to help.
Here are the main 3 mistakes I made.
1. The business plan included no primary customer research such as: Who really wants and needs my services? What do they see as the benefits (as opposed to what I saw as the benefits)?
→ Relying only on secondary research is not good enough. YOU must get first-hand information.
2. I had gathered no actual customer feedback on my proposed services from my target market such as: What do my potential customers think about my ideas about what they want and need? What should I change to make my services a better fit?
→ Creating a small yet viable product or service to test before you spend countless hours and dollars on perfecting something that customers don’t want is crucial. (This idea of a Minimum Viable Product (MVP) is what successful web and mobile companies use to their advantage all the time.) You CAN’T assume you know what your customer wants and needs.
3. I had no model or plan for how I would develop new customers and maintain customer relationships such as: What are the preferred ways of connection, engagement, and retention in the eyes of my customers?
→ Thinking and theorizing past the first connection, engagement, and sale from the customer’s viewpoint is critical to sustainable business.
My business plan was an empty shell holding empty promises. It just looked so good, how could it be so wrong?
And as I continued to searched for how I would make my entrepreneurial debut, the business articles I read and the classes I took consistently encouraged me to write yet another business plan.
Fast forward 10 years and two more business plans later.
From listening to my clients and colleagues, I know I am not the only one who has fallen into the trap of having all the “right” information and gathering supposed customer feedback but really having no intimate details on the heart and mind of my customer.
Truly understanding the hearts and minds of your customers (beyond the typical customer feedback strategies) is the only way to make your business sustainable. I now work from a highly flexible strategic plan that I am constantly working to inform with first-hand primary research about the hearts and minds of my clients and I encourage anyone I work with to start here too.
So, should you scrap your business plan for 2013?
- Have you personally talked to 50+ customers in your target market and really listened to how they describe their wants, needs, and desired benefits?
- Have you created, tested, and gathered customer feedback on a MVP?
- Have you stepped into the shoes of your customer and thought about and tested PREFERRED ways to connect, engage, sell, and sustain customer relationships?
If you answered “yes” to all three questions, great job! It is time to formalize your findings into a business plan. If you answered “no” to any one of the three questions, any business plan you write will look really good but likely not deliver success.