Define Your Business

“It’s incredibly easy to get caught up in an activity trap, in the business of life, to work harder and harder at climbing the ladder of success only to discover that it’s leaning against the wrong wall.”

- Stephen Covey: Author, Businessman, Keynote Speaker

I’ll tell you one thing that is almost a given when it comes to entrepreneurs: founders are idea people. Being someone that can easily identify opportunities is great, especially if you can take advantage of gaps in the market. However, it’s important that you develop the skills to know which opportunities are really money-pits in fancy clothing. Moreover, once you’ve distinguished them from the lot, you need to avoid them. Don’t try to be the unsung hero of the business world. If it walks like a duck and quacks like a duck, then it’s most probably a duck.

• What does that mean?
• Simply put: don’t try to paint a potential pitfall as an opportunity.?

Successful business founders are capable of narrowing their vision down to one key opportunity, and then they swiftly act on it. In order for you to hone this skill, you need to be completely honest with yourself. I can’t tell you the number of businesses that fail because the entrepreneur at the helm went with an idea that they thought was cool, instead of tapping into an idea that a select market – or wider pool of potential customers – thinks is cool.?

You have to think ahead of the curve in order to save yourself time and hardship. Yes, you can start a business at any age and after any number of failures, but many people burn out far before the finish line because they keep getting in their own way and prioritizing ideas that are going nowhere fast. Work on the roots of your business and nourish them. Grow from the bottom up and take note of important insights along the way.?

When it comes to starting a new business, defining it is the very first fundamental step in putting together a solid business model – more commonly referred to as a business plan. Look, I’ll be completely honest with you. If you’ve never done this before it can be incredibly overwhelming and a daunting task, to say the very least. Start where you are. Start with those thoughts and ideas, and let’s take it from there.?

First question: What’s your business model??

If you’ve never heard that question before, and you’re staring blankly at the page right now, don’t worry. You’re not the only person in history to go blank after that question. When someone asks you that, what they really want to know is how you plan on making money. At least, that would be the more direct interpretation of the question.?

Of course, this question then leads to other questions such as:

• Who is your customer?
• What problem do you solve for your customers?
• How will you reach, attain, and keep customers?
• How will you stand out in your market?
• What are your costs?

Making Money

To start answering some of these questions and defining your business, you will need to figure out where the money will come from. There are notably four determining elements to this stage:?

• Who will pay??
• How much will they pay??
• How often will they pay you??
• What portion of every sale will make its way to your bottom line so that you have a profit?

This is essentially asking who your typical customer is, what you think they are willing to pay you for your product or service, whether it will be a once-off purchase or a subscription-type service, as well as what percentage of that payment will go to costs and expenditure.

I want you to think about profit for a minute. In order for you to break even, you need enough money coming in to cover all of your costs. However, to make a profit, you need to price your goods and services to cover your costs plus a little extra for your bottom line.?

You can’t define your business without it!

Timing and Planning

How you plan to make money is one part of defining your business, but something that most people don’t factor into the puzzle is when you expect the money to come in. This timing will tell you how much money you need to have saved up to live on until the business starts making money. It will also be a clear indicator of how soon you can upgrade equipment or when you can hire an accountant to help with the taxes.

How will you be paid?

Defining your business will also take into account how your customers will pay you.?

• Will you accept credit cards or PayPal??
• Will you have 30-day invoices open??
• Will you be renting or leasing props or other equipment?

Each of those options has financial consequences that affect your business. As you set up your business and define how your customers will pay you, consider how each of the options will affect your cash flow. Defining your business, whether you are providing a service or selling goods, is an important first step to setting up a business model or a business plan. Don’t try to skip over this part and go straight in for the kill – even if you’ve got the cash to splash.?

How to Identify your Business Niche

To identify your business niche, figure out how you can differentiate yourself from your competitors and what area you can specialize in. Ask yourself these questions:

• What do I enjoy doing? Even within your field, there are some things that you like doing more than others. What are the projects that you get excited about? Paying attention to what you enjoy is important since we generally enjoy doing the things that we are already good at. Author of Rich Dad, Poor Dad, Robert Kiyosaki, posed a good argument on this point. He proposed that he did the things that he didn’t like in his younger years in order to be able to enjoy the things that he does like in his older years. However, you can’t press on doing things you absolutely hate. Just be sure there is a balance and a passion in there somewhere.?
• What do I not want to do? Almost as important as figuring out what you enjoy doing is figuring out what you don’t enjoy doing. Think about the projects that you drag your feet on or avoid doing. Instead of competing for projects that include work that you don’t want to do, leave those for others, and concentrate on the ones that you’ll enjoy and will be a better fit for you.
• Where do I have the most experience? Think about how you have gained experience in your field. Was it through working for a large corporation, a small business, or a non-profit? Was it in a specific industry, or a particular area within the broader field? In my case, for example, I started my financial career in tax preparation, tax representation, and accounting, so a lot of my experience was focused on tax law. Moving on to focus on tax and accounting software was a natural course for me.
• What is my target market? You might start with a broad target, but you’ll need to narrow it down from there. How can you break down your market into more specific segments? For example, both startups and established businesses may need your services, but would one be a better fit for you?
• Who values my services? Some clients may value your services more than others. Think about the clients you’ve worked with and identify the ones who understood the value of what you were offering to them and were happy to pay your fees. What do they have in common?

Once you have identified your business niche, you will be in a better position to market your services effectively. You’ll have a clearer idea about what it is that sets you apart from the rest in your field. It will allow you to fully grasp your level of expertise within your field, as well as who the key potential customers are who will value your services.?

With all of that information clearly defined and laid out before you, you’ll be able to craft content that will speak directly to your ideal clients. You can confidently put together your online marketing plan, knowing that prospective clients will be much more likely to stick around on your blog and read your social media updates!

The establishment of thought leadership truly drives sales in this day and age.?