Business Plan, Step 2: Don’t Go Broke! | Ep. 071

Today we are talking about the importance of researching any barriers to entering into the current market for your new business idea. And sometimes those barriers are YOU!

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Transcript

 First things I say is, what are you going to call your business? Like a deer in headlight.  I got to name this business. If anyone starts a business and things, they're not going to mess up, then you're going to be highly disappointed.

I see that with business owners too. It's, it's very similar. Businesses start their business and they open their doors and they're like, come  and people don't come.   Don't go broke at your grand opening. No, no The grand opening is just the beginning. It's the worst thing you could do. There's so much That needs to be done before the grand opening, that if you haven't done that, you're going to go broke at your grand opening.

Yeah. And we see it , all the time. A lot of businesses that I work with, they put every, they think that that's like the ending, like the grand opening is what they strive for. And then when they get there, they spent all their money and they put all their resources into it. You're laughing because. Yeah. Like we're preparing for our grand opening. Yeah. Right. And, uh, building out that space and there's so much more involved than I was expecting.  Every day I'm learning something new that I did not know before when I was originally planning and I did planning, John went to me, what, a month ago, not even a month ago.

And he's like, we've been talking about this building. Me, I have a whole business plan and I've been like trying to find investors and like thinking that the whole thing through probably on the other extreme, like nothing is ever going to happen. Cause I'm planning it too much analysis paralysis. Yeah.

And John just comes to me and he's like, I got a building. We're starting, we're opening in three weeks. And that's how you do it right there. He walks me through this building and everything is dark teal. All the trim is dark teal. There's paneling on the wall and nasty carpet. And I'm looking at him and he's thinking he's opening in three weeks.

Yes. And I'm like, you're crazy because you have to do like four. Coats of paint  on the on this trend and it's not just bottom trim It's like this elaborate beautiful top trim and we're doing a build out in the front Like we're knocking down walls and all that stuff, too. You crazy  But  to you know to the to my testament and to really our testament we were speaking about this model For a long time.

Yeah, so we had the Foundational process the foundational aspect of it already already in play. Mm hmm It's just actually making taking that step in preparing for the grand opening is when you're gonna find a lot of uh oh.  I Didn't I wasn't ready for this. Mm hmm, you know, and I think the difference With this that we're going through versus what a lot of other business owners go through is they don't go through that planning stage in the beginning.

Yeah. The planning part, we, we are planned. It's all about research. Yeah. All about research. I'm telling you. Yeah. So we're going to talk to you guys today a little bit about how not to go broke at your grand opening and how important it is.  To look at your grand opening as just the beginning, because really that's just the beginning.

And I cannot even tell you how many times I see businesses do their grand opening. They have, after that, they have no money for advertising. they have no money for saved up for supplies. They're expecting to open their doors , and this could be a physical location. It could be an online location. I think it all relates.

And they're like, , they're expecting people to rush to their business and to be able to fund their business from day one. And in all reality, that's not how it works. It's not going to happen like that. Not at all. There's steps in the game that have to be taken to be, to have a successful grand opening and continued success from that grand opening.

Um, and. We can start from the first step, right? Yeah, let's do it. You're a target market your target market. You're not selling to yourself I mean you may have thought of Hey, I need this in my life type of thing when you created the idea But you're not gonna buy your own product or this is what I enjoy doing.

Yeah, I enjoy Baking cookies with lots of sugar and gluten, but maybe your community doesn't want cookies with sugar and gluten Yeah, maybe they want gluten free sugar free cookie  And that's  Honestly, i've been hearing a lot more about that. Yeah, like there's there's an actual you know, there's a need for that but You Like, if you're not doing that research, that market research to understand if there's other needs out there for what you're coming up with, then maybe nobody's going to come to your grand opening.

Yeah. And then what are you going to do? You're going to be stuck like Chuck. Yep. You got yourself in the lease agreement, you ordered all these supplies, you hired all these employees, and now you don't have money to pay for any of that. Nope. Nope. Researching your target market is very, , very important and not making what you want or what you enjoy doing, but what your audience wants.

Yeah. And there's categories in that research. Yeah. And you have to know The caricature you can't sell to everybody. You can't open up a bakery I just use a bakery because that's something that everybody understands And be like everybody likes cookies. Everybody likes cake. My audience is everybody because That's not going to get you very far.

You need to have you need to know exactly Who your audience is I want to sell to 12 year old kids getting out of school. Yep And then everything that you do can revolve around that. Yeah You Exactly.  Like that is a step that so many business owners miss that is truly detrimental to the success of your business because then you're going to have to pivot on a whim  and if you're not willing, ready and able to do that.

Yeah. So how do you think, how do people find their target market? Cause I think a lot of people know that they need to know their target market, but how do they find them?  There's a, there's a lot of several ways. Number one, you can use social media, do polling, right?

 Just asking questions out there on social media. You can, reach out to a trusted group of friends and family. Yeah. and say, Hey, what do you think? Would you buy this if this was offered to you? Is this something that interests you? Um,  Facebook groups are really good, whether you're using Facebook or not using community groups.

So like here we have a bazillion of the, of a group with the same name and there's thousands of people in there and people love to be heard. They love to give their opinions. And if you just go in one of those established groups that already have a huge following and ask a question, Hey, if I were to open a cookie shop here in town, where do you think a good location would be?

And what kind of cookies would you want? Love it. And then they will go crazy. And not that you have to take all of their opinions. Because there's going to be a lot that you are probably inaccurate. But for the most part, you're probably going to get a lot of really good information in that. And  you'll see a trend in the responses.

Um, so that's a good way to see, hey, is there a need for this? In this, in the community that I'm in to, to provide that. I think that's a, that's an awesome way to do it. But that the point is. You should be doing that, right? Like if you're not doing that, then you're setting yourself up for failure. And the whole point in this podcast is step number two of your business project, of your business plan. So last week we talked about creating your name, which by the way, we left a lot of points out last week when I was kind of reflecting on the podcast, 

so, if you go to  www. thebusinessproject. com. The link should be in the comments here. Then you can take the entire first couple of courses for free. It takes you 15 steps to launching your business. There's homework, there's printables. Um, there's a business plan sample that all you have to do is literally just replace the information with your information.

All of that is on our website. And so the stuff that we missed. Talking about last week. You can catch for free on the business project.  For real like these are actual tangible things that you can have in your hand to help you every step of the way.

Go to the businessproject. com and dig deeper, make that part of your research, put that into  your business planning process,  use that as a resource. Cause that's what it's there for. Yeah.

So that was step one. That was last week is creating your name. And then this week is step two. And we're talking about your target market, your opportunity.  That's where we're going with this and you're building your business plan. So if you go to the business project website, Print out that template and then as we go through these throughout the week just fill in the information and then by the end of it You'll have your entire business plan.

How cool is that? Yeah, and even if you are an existing business, your business plan Should be a living breathing document It shouldn't just be something that you write once when you open your business and you put it in a drawer and you never look At it again like an old encyclopedia  Not that you want to open it Blow the dust off that sucker.

Yeah. And, and let's get moving. Like, let's dig in. Cause your target market may have changed or maybe you're missing out on opportunity. Uh, your community changes the way that you market changes. Um, you know, all of this stuff changes and it is changing these days very quickly. And if you're not continuing to take the time to sit down and analyze that within your business, then you might be missing out on a lot of opportunity.

For sure. Yeah, should we hear from Lorneth? Let's do it. 

Hi everyone. My name is Lorneth Peters, director of marketing and communications at the Better Business Bureau serving middle Tennessee and Southern Kentucky. It's the end of the day here in my household and guess what I'm doing, checking my mail, something I need to do more and I'm encouraging you to do more of, but I always try to check my mail at least once a week.

Why? Because when we let our mail pile up, we miss things such as I had a consumer who contacted me and said, Hey, I finally checked my mail after three weeks. And it says in here that I apply for a debit card from Cash App. I don't know what Cash App is. I don't know why I received this debit card. I said, well, it means someone was able to utilize your name, your address, your social security number to actually apply for that Cash App debit card.

So what should you do? Reach out to your credit bureaus right away. Let them know that your identity Was  tampered with. Let's put it that way.  The other thing I'm saying is if she did not check her mail for three weeks, This is what happens, right? And this is what can happen to us. Always take time to check your mail.

Make sure the information you're receiving is not foreign to you. If you never applied for a debit card or credit card. If you never applied for certain information. If you never added your name to a list to receive a certain magazine. Your identity may be compromised. So I'm encouraging you as I encourage myself, let's take a moment, take some time.

We're all busy, but review your mail, just like I'm doing right now. One by one, make sure anything you have is actually what you requested. Not what someone else is using as it pertains to getting a hold of your identity and using it for their purposes. So that's my tip for the week. Let's all check out mail.

And thank you once again for having us. If you need anything, always reach out to better business bureau by email and info at go BBB. org. Have a great day.  And we're back. So that snail mail,  I check my mail every day. Really?  I am terrible at this.  I check my mail like once a month. I hate mail. No, I don't play around.  But you're also a numbers tax guy, like business, like you get, you like that stuff. You're like, yeah, I got paperwork. I don't like know that there's mail sitting there.

That's like going to do something bad to me or something. So I go through that sucker every day. And if it's something out of the ordinary, I'm on it. My husband gets so mad at me because it is. I'm the one apparently that got designated. I love how you get married and then like you just get stuck doing things whether you like it or not. 

Uh, that's one of the things that I got stuck doing  he's like, have you not checked the mail in like a month? Nope. I have not. If you don't check it in a month, then you gotta spend a whole day going through like Probably, you probably have this much stuff that you have to go through.

A lot, it's a lot, and half of it is really important. I'm like, well, we missed that. I hate it. No bueno. Check your mail.  I need to listen to Lorneth,  thank you, we love the BBB middle Tennessee. Appreciate you. What's up, Game Gear? What up?  John Crespo, you're watching. Hey, hey, hey I need some help . I think it's gonna be wonderful because You don't have a competition. Yeah. Yeah, so I did some really good Big thought around where the location should be right for this,  for the next step in the journey. And, um, because it entails. Mailbox services, virtual office services, and shipping and packing services.

It has to be in an area where there isn't much of those services going on. There has to be like , , a dead zone, a demand. Yeah. There's going to be a demand there. , so if anybody lives in our town and has ever been to the post office, you know what it's like the line is ridiculous.

And it takes, that's a, that's an hour, two hour. Trip if you ever go to the post office, that's another thing. I hate doing it's going to the returning things Answering mail returning things and going to the post office. You know are my top three. That's why we're answering that problem  Because people hate to do it.

Yes, and they hate to stand in line So the two locations actually the two locations we were looking at Exit 1 area and exit 11 area in the Clarksville, the town that we live in, are two areas where there's like a dead zone when it comes to that kind of stuff. So, um, we picked the exit 1 area to start with.

Yeah. Then we'll venture off to  exit 11. Mm hmm. This is our model. That's our model. But  We looked into the target market, which we just talked about, and we looked at our competition and researched  probably even more research than we should have  about competition and moving forward with that.

So that is the next step is researching who's doing What around you, like who's doing similar things around you. And I think there's a couple of important notes when it comes to researching or competition. The overall objective is to figure out how you fit. It's not to scare you away from doing something.

So like, if there's other people that are doing what you're doing, it doesn't mean that it needs to scare you away or that you can't do it. It's just. How can you , differentiate yourself between your competition? Also, it's a great way to figure out your pricing. Do you want to be the cheapest?

Which I would highly not recommend. Um, do you want to have the best quality service? Do you want to, um, have the best quality product? Uh, is there something like unique that you can do within your business that people can get excited about? So the whole purpose in researching our competition is. To see how you can fit your business into what's existing 100 percent Yeah, and it's okay to have  similar competitors, people who are in your similar industry out there with what you're doing, because as you're doing your research, you know, you can look at their reviews and you can see what people are.

Let's say complaining about as far as what that product or service is. And that helps you build something that will meet,  the needs of the people differently. So it's something that helps set yourself apart. So don't worry about competition. There's always going to be competition. I'm a firm believer that there's nothing new under the sun, but focusing on how to make what you're doing better and, um, providing additional value to that.

We'll go a long way in helping you be successful. Yeah. A great example of something,  when competition is good. And I think that I see all the time. I hear businesses all the time, specifically in our town and other towns to talk about this being a bad thing, you know a new restaurant opened up next to me.

So they like freak out and they get upset and they get mad and all reality. If you say have a downtown and you. You have one restaurant downtown. That one restaurant is doing all of the marketing themself. So somebody that's going to that restaurant is going to that restaurant because that restaurant put money and time and energy into marketing.

If you have five restaurants downtown, then you've got four other restaurants. People aren't just going to go to one restaurant all the time. And same with boutiques. That's a great example of boutiques to people are going to go. That's why the mall used to be so popular. It's not anymore. Cause online shopping has kind of taken over, but, um, it's still a good example.

You can go to one place and visit multiple locations and you've got, you know, 10 other businesses that are marketing for you. They're not specifically  for you, but they're spending time and energy to get people there. And that's time and energy that you don't have to spend. That's synergy right there.

It's like you guys all come together and you create something better. And so I think looking at. Looking at it in that way of, okay, so there's a restaurant opening next to me. Let's not look at it as a bad thing, but how can we capitalize on that traffic that they're paying for? You know, maybe putting a specials board out in front of your door or working that with that restaurant to do like a, a tasting tour or, uh, you know, there's things that you can do if you switch your mentality on working with your competition.

Yeah, and yeah, that's, I like that you brought that up, because that makes a whole lot of sense. I look at, uh, in our area, you know, whiskey, bourbon, all that stuff is pretty popular, right? And so, but there's, so there's several distilleries in our area, and they just got together and created a bourbon. A whiskey tour, yeah.

Yeah, the bourbon trail. Mm hmm. And that gives an opportunity for people to go try out. All the different things and actually increases business that way. So competition is not necessarily a bad thing. It could be a very good thing if you look at it the right way and you approach it the right way. Mm hmm.

And I just see, I see so many people and it's such a sad, it's a sad thing because they shut down and they get mad and they're like, Oh, there's another, Stinking restaurant is moving in right next to me and they get so mad and upset and it ends up hurting their business Because they don't see money Walking by their business.

It's like literally all of this money and opportunity is walking by your business and you're you're just sitting there pouting  Doesn't do anything. No, it doesn't work  Get over it Yeah, and take advantage of it. Yeah, exactly. Okay, so we talked about cart target market talked about competition  You won't get into what problem you're solving.

Yeah. Yeah, so and we hit on it a little bit so when we were doing the research of where we're gonna put  the location the mail service and packing services is Are you solving a particular issue or problem in your community with the product of service that you're providing right and And uh,  if so, like What is that problem and what, how are you going to solve it?

Right. So that's a, that's a, a major way to understand how you're going to present it,  you know, because, and that's another, that's a truth at, that's a way to go after your target market. You're going to ask some questions about the problem and find out what is needed to solve it in those, in those questions that you ask.

So, what problem are you solving with what you want to do, what you want to provide, what are you solving? Find out, and so that you know how to,  Bring it out to the market, bring it out to the world. The, I just, uh, girl, my team and I were texting back and forth this morning because there's a billboard here and it really caught both of our attention, like enough to where she texted me about it.

 But it says , warning and I'm paraphrasing. Have you been hit? And it's for an attorney. And I think people see that it's a big, bright yellow sign. It's so simple. The messaging is so simple, but it, speaks to our pain point. Right? It's that he's solving a problem.  That's something that we all know.

Everybody talks about in our city is an issue. And so it draws your attention. And so the, the quicker and the easier and the simpler you can be about your messaging on knowing your target market, knowing where you fit and what problem problem you're solving and be able to effectively communicate that as simple as possible, the better you're going to do.

Yeah. Communicating that is important. That's so huge. I like that because, uh, Everybody complains about the traffic and the accidents here. Like our name is not Clarksville, it's Crashville. Yeah. You know? So that was, that's pretty smart. You know, they, that attorney understood the need and understood the pain point.

And he's like, pressing it, pressing that button.  Get people to reach out to him. Yeah.   If you don't know what problem you're solving, if you're just baking cookies because you enjoy baking cookies, then you're going to have a hard time getting customers in the door.

So that leads into, he found the problem and created an opportunity out of that problem, which is our next point. Yeah. Opportunity. Opportunity. That's on you.