So… you’re finally doing it: starting a new business, that is. They say the biggest challenges reap the biggest rewards, and you’ve obviously bought in. And, since the National Federation of Independent Businesses declared that there’s never been a better time to start a business, your timing is perfect.
Note: This is the fifth and last installment in "The Five Essentials for Your New Business” series, dedicated to small, medium and startup businesses. In this series, we cover how to create a Business Plan, Company Overview, and Annual Marketing Plan, as well as offer advice on the best Tech Tools to grow your business fast and free Sales Proposal templates you can customize. Keep reading for highlights from each of the previous installments, as well as information on where to go for more help.
Whether your long-term vision is to maintain a small business, or grow your startup into a large company, you need resources to guide you. After all, with every new business comes an influx of advice, opinions, demands, and of course stress — which makes it hard to stay focused on fulfilling your dream.
As an entrepreneur, you’ll quickly realize that the best way to achieve your dream is to ground yourself in reality. So start by setting small goals. To help you do this, we've tapped SMB (Small and Medium Business) expert Ramon Ray for his opinion on what those goals should be, as well as what resources to use to help complete each goal.
Ramon has a wealth of knowledge on the subject of starting and growing a new business. He is an entrepreneur and four-time small business owner himself, as well as a global keynote speaker, best selling author and founder of Smart Hustle (did we mention he’s also a self-made millionaire?)
With Ramon’s help, we've compiled a list of five essential steps you should follow to start a business, from presentation templates (created using an amazing new PowerPoint alternative) and affordable tech tools, to helpful guides and online resources — all to support your “startup” plunge. The "The Five Essentials for Your New Business” include:
- Write a Business Plan
- Create a Company Overview
- Assemble your Tech Toolkit
- Formalize a Marketing Strategy
- Outline a sample Sales Proposal
#1: WRITE A BUSINESS PLAN
Starting with a business plan is a crucial step in the process of launching a new business. Yes, you can get going without one for sure, but you’ll have to backpedal later. “A lot of members of the SMB community debate whether or not a business plan is really necessary,” says Ramon. “The answer is Yes. For one simple reason — a Business Plan keeps you focused. It’s the framework for your entire company. You can’t achieve that on the back of a napkin.”
In other words, it forces you to answer various (important!) questions like:
- What are our company-wide goals?
- What “to-do’s” should we include on an annual timeline?
- How should we organize our budget and financials?
- Who do we hire to create a rockstar team?
- Who is our target customer?
And the list doesn’t end there. But determining the answers to the items above (which are all necessary to a good business plan) will help get your initial thoughts together in terms of strategy — aka “how” you plan on building a successful business.
Another huge reason for creating a business plan? It will force you to find out if there’s a demand for your product. “That’s the trap a lot of new business owners fall into — not knowing if there’s a true demand,” says Ramon. “It’s important to show the research here; you need to make sure people actually want to buy what your company is selling.”
[Quick note for startups: You’ll also need a business plan (otherwise known as a pitch deck) if you’re hoping to raise investment money to help grow your business quicker than, say, the “boot-strap” startup approach. Potential investors will most likely request to review a business plan before they’ll even take a meeting with you.
Rick Frasch, a partner in a Silicon Valley technology venture capital fund and angel investor, agrees: “When raising money, you need to interest VCs or angel investors with the elevator speech and presentation, but you can only close on the money after the investor reviews, questions, and buys in to your entire business plan.” If you take the time to write a professional business plan in advance, they’ll have more confidence when it comes to investing in your company.]
Just make sure your business plan looks professional before you start presenting it to the world. “Your business plans needs to look good first and foremost,” says Ramon. “After all, it’s a representation of you, and therefore, it’s a representation of your business.” (If you need help designing your presentation, sign up for free to try our A.I.-powered design software.)
Customize your own Business Plan here.
#2: CREATE A COMPANY OVERVIEW
A Company Overview is helpful for a variety of reasons. Firstly, we believe it’s the single most powerful way of recruiting top talent. As the public-facing “manifesto” for your new business, it offers an overview of your company’s Vision, Mission and Value Proposition. It also details your product, your team and your timeline — which many a potential employee (especially executive-level hires) should request to know.
Start with the Vision Statement: the "why" and "how" of a company as it relates to long-term goals for the company. As a new business owner, this should describe your nirvana — or the desired future position of your business. As an example, General Electric's corporate vision is “to become the world’s premier digital industrial company."
Next, a Mission Statement clarifies the "what" and "who" of a company, and is more grounded in the realities of what the product or service is today. It should ensure that the entire company is aligned on a daily basis and headed in the right direction. Tesla’s Mission Statement reads: “to accelerate the world’s transition to sustainable energy."
According to Ramon Ray, “A good mission statement should set a strong directional path for everyone at the entire company,” he says. “Every day, in everything they do, employees should ask themselves, ‘Did we embrace our mission? Did we stay true to it?’”
Then, on to the Value Proposition section of your Company Overview, which focuses specifically on serving your customers. What problem are you solving for them? How does your product solve that problem? This is super important when it comes to your product roadmap as well (the official document that outlines the goals, milestones, and deliverables for a product in development).
Product roadmaps are often produced by business owners or managers for the purpose of communicating product strategies, tools and initiatives to both product developers and external stakeholders. Q: What is the #1 thing that dictates a product roadmap at a healthy, successful company? A: The Value Proposition.
Slack's Value Proposition is "Be more productive at work with less effort." Here, simplicity is key. It's quick to communicate and easy to comprehend for everyone, both inside and outside the company.
Okay, so you’ve outlined your Vision Statement, Mission Statement and Value Proposition for your new business. Accomplishing these three tasks is more important than you realize, as it shows off the founding team’s “soft skills” and “emotional intelligence” as well. According to LinkedIn CEO Jeff Weiner, these two qualities are becoming increasingly important in the modern business world.
A good Company Overview taps into people’s emotions in a major way and establishes the “ethos” for the company. Potential investors and partners will appreciate your thoughtful approach to goal-setting, team building and internal communications — yet another reason why a Company Overview is a great supplement to a Business Plan.
The rest of a Company Overview includes the “Our Products” and “Our Team” sections, which details what products are first to launch, and who the key players are on your team. It also talks about who your customer is, and how you will adapt your product as the customer evolves. Alluding to future plans is a great way to get people excited for the possibilities that lie ahead, and to show that you’ve thought through the opportunities for growth and expansion. After all — markets move fast, and you’ve got to be flexible.
Customize your own Company Overview here.
#3: ASSEMBLE YOUR TECH TOOL KIT
As we said, there has never been a better time to start a new business in many industries. In addition to economic incentives, improvements in technology have automated many manual tasks so businesses can grow quicker. After all, when team members can “hand-off” the grunt work involved in the day-to-day tasks of running a business to smart tech tools, they can concentrate on higher level projects that will make a more sizable impact (aka “move the needle”).
These days, there are dozens of best-in-class digital products out there that will help you be more productive in less time and at a lower cost. From software-as-a-service (SaaS) tools and cloud storage providers to high-tech hardware and beyond — it seems there’s a solution to nearly every business problem.
But which are the best tech tools for your needs? We’ve compiled a list of our favorites, which includes online software programs for automating things like Human Resources, Project Management, Marketing, Sales and Billing. Our featured tech tools are best suited for startups, small and medium businesses that can still scale with you as you grow, including: Gusto, Trello, Invision, MailChimp and more.
The good news is, there really is a solution for every business — any size and at any stage — and everyone has their favorites. For instance, Ramon Ray prefers Asana over our suggested Trello, and promotes Zapier as a best-in-class integration “hub” for all your business-related apps to talk and connect to each other. “What tech tools you choose will come down to how you need to use the tool,” he says, “and if it can grow and scale with you.”
Our advice? First, talk to your network and read online reviews in your industry for second opinions. Then, do a test run (or schedule a demo) for 2-3 top software programs in each category and choose which tech tools work for you, your staff, your company and your stage of growth.
Read “The Beautiful Guide: Tech Hacks for New Business” roundup here.
#4: FORMALIZE YOUR MARKETING STRATEGY
Ok, so you have a business plan, and you have a product or service (or at least a prototype) — so now it’s time to think about how you’ll market it. After all, no one is going to buy a product they don’t know about, so a marketer’s job is to spread the word. This starts with a solid Annual Marketing Plan.
First, clearly state your company's "big goal" for the entire year. Note: some in the startup world refer to this as your North Star Metric. Regardless, it's a quantitative metric (a number) that represents the success or failure of your product. This could be anything from generating some amount of “Sales Qualified Leads” or a specific number of User Signups (Email Registrations) to Plan Upgrades or Subscription Renewals. Whatever your company’s big goal is, your Annual Marketing Plan should focus on how the marketing efforts will support and encourage those goals.
From there, highlight 3 main initiatives that the marketing team will focus on. What categories of marketing work best for your audience? Is it search-based queries on Google, branded partnerships with influencers, or paid advertisements?
Next, what distribution channels will you choose based on audience preferences? Are they active on social media, or heavily engaged with specific media outlets/digital publications? Or, perhaps they are influenced by advertisements. In any case, do some research on this front and come back with a plan for each campaign.
Important: Be sure to set clear and specific “success metrics” prior to launching each and every campaign — be it small (like a single Instagram post) or large (a multi-channel, integrated nationwide launch). Getting in this habit will instill some direction and accountability across teams and team members.
Once you know your marketing categories, distribution plans and success metrics, commit to tracking the data after each campaign. With a regular “Campaign Retrospective” meeting cadence, the entire team can gather, take a look at the stats, and determine whether or not the ROI (return on investment) warranted the total marketing spend for that project. In other words, did the campaign put you closer to your company's big goal?
An Annual Marketing Plan also encourages business owners to complete the very important step of User Research. Warning: this can also be referred to as Segmentation, or Personas, or Consumer Psychographics. Simply put: Get to know your (current or potential) customer. Who is your audience? What makes them tick? What’s their average age, gender, socio-economic status, location? You’ll need to gather this information before you decide on the rest of your marketing plan.
Ramon Ray agrees: “Many small business owners make the mistake of thinking they need to market their product to everyone. ‘It’s for everyone!’ they say. Is it though?” Ramon adds “Figure out your specific target market and your user personas; the more targeted you are at the start, the more successful you’ll be. It’s true what they say: ‘If you try to please everyone, you end up pleasing no one.’”
User research can be quite the undertaking, but for startups and small businesses, start by scheduling 20-30 interviews with potential customers that reveal 1) their pain points on the subject, 2) what their needs are, 3) what they’d be willing to spend, 3) how they like to be marketed to, 4) what current products or services they’re using and 5) if those products or services are working or not. Then, use that information to craft 3-4 main personas (and update your Annual Marketing Plan accordingly).
Your personas will help inform everything from the creative concepts and messaging for your targeted campaigns, to the content formats you’ll need to produce (video, email, infographics and event signage are just a few examples). You can gather numbers for each project, which will help you estimate what you’ll be spending each month. Total marketing spend is based on your revenue projections, and can vary by industry from around 8% (consumer packaged goods) to 13% (tech).
Next, you’ll present the competitive landscape, but go into more detail than you did in your Business Plan. A thorough SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) can be an enlightening exercise, as well as creating a marketing funnel (sometimes called a sales conversion funnel) showing how potential customers will progress from the “Discovery” phase through “Purchase” to “Retention” and on to becoming evangelists for your offering.
Towards the end of your Annual Marketing Plan, be sure to call out some Macro Success Metrics (cost per customer and conversion rate are two examples) and include Attribution Model touchpoints before closing.
Having a marketing plan that you continue to update and evolve will help define success as your company grows. After all, "there isn't 'one right way' to have a great marketing strategy," says Ramon. "You have to test and see what your audience is using. Test, test and keep testing."
#5: OUTLINE A SAMPLE SALES PROPOSAL
You’re almost finished, we promise! Last but not least: the Sales Proposal.
Eventually, your business will need to start making money. Sometimes that happens right off the bat (hats off to you!), and other times it takes time to nurture that first sales lead. Regardless of your timeline and sales goals, figuring out your pricing structure is the first thing you’ll do when it comes to creating a sales proposal.
Ramon’s advice? Get help. “Pricing is critical,” he says. “Don’t just use your gut. Ask for advice and do a ton of research. Price is so much more than a number — it’s a positioning statement.” So take a look at your competitors, then weigh that information against your unique value proposition and cost of goods and labor. If you’re selling a higher quality product, make sure the price reflects those upgrades. And vice versa. There’s some psychology involved in pricing, so do your homework.
Tip: Madhavan Ramanujam and Georg Tacke of Silicon Valley's Simon-Kucher & Partners are experts on the subject of pricing, and we suggest reading their book "Monetizing Innovation" or helpful blogs like this one.
Once you have your pricing structure set, you can create your first Sales Proposal. Start by offering an Overview of the potential partnership: what high-level value you’d bring to the table as a supplier or provider of goods and services. Then, offer a bit more background on your company and product on an “About Us” page.
Next, outline your key advantages over your competitors — the things that set you apart. It’s also a good idea to give a glimpse of the industry as a whole and allude to the direction it’s headed. This will give your potential sales partners the idea that you are on top of trends and will bring additional value to the table by consulting them in ways they can improve their own business.
Giving an overview of your products is the next step in your Sales Proposal. This could include a product description, suggested retail price, proprietary technologies, etc. Then talk your potential client through specific Partner Benefits they’d receive from your company. Case Studies are a great way to prove success, and Testimonials add strength to your case as well, so be sure to include those if you have them (if you’re brand new, this can wait).
Then, get into the “nuts and bolts” of pricing and order quantities. A data table is a clear way of presenting the different package offerings to your potential client. Talk them through the process from beginning to end with full transparency, so they feel comfortable entrusting you with delivering the product or service. After all, no one likes the experience of writing a big check and then not feeling informed of where the money is going.
Once you have educated your potential client as to the product, partner value and pricing, make your Proposal: What product is right for them, what that will cost them, and the minimum investment required. If you want to link a formal PDF or digital document here, feel free.
Tip: Always request feedback after presenting a sales proposal, as your potential customers are the best source of valuable, candid reactions to your brand, product, pricing, delivery and more.
Once you’ve thanked them for their time, we suggest following up in a few days and asking for feedback. Perhaps there was some information that you left out, that would have made the “sell” easier. Or maybe your pricing isn’t in line with comparable partners, or your delivery needs work — collecting insights into how your Sales Proposal was received will enable you to have a more successful outcome next time.
Get a customizable version of this Sales Proposal template here.
So there you have it — the five essentials to starting a new business for any startup. One thing we didn't include that perhaps we should have? The most important ingredient/s to entrepreneurship, according to Ramon Ray:
"Success is 70% passion and 30% strategy," he says. The good news is, if you have the passion to start, you can develop the strategy organically by completing each of the five steps above. Now go get 'em!