The importance of industry and market research for your business plan with Howard Rosen, CEO of Lifewire
The challenge for any business is to collect the large amounts of research and then be able to condense it into an impressive (but brief!) twenty-five-page business plan. Howard Rosen, the CEO of Lifewire, says that the plan needs to be succinct yet comprehensive and match what you are saying. If it isn’t, the listener will wonder why you don’t just get to the point and “get to the meat” of your business.
The “meat” of course comes from all the research you have done previously. In this two-part video, Howard discusses the importance of collecting research and validating it.
For Howard, it always came down to the basic question “does it work?” He knew he had an excellent idea for mobile health, but the more he talked to people the more he realized “I better make sure this thing works!” People were always asking him to show them the product, to prove it to them, and to match what he was saying by what he was showing them. Research helped him prove his product and prepare to present it in his business plan and to his customers.
Research, Research, Research
The importance of research is to test your idea, to see if and how it works in the real world—not just in your head. Is your idea really that brilliant? You might think it’s an excellent idea, until your research shows that you are wrong. Discovering that your idea might be conflicting with your research is a good thing: it means something has to be changed.
Part of Howard’s research process was to reach out to 3rd parties to help him validate his assumptions about his product. One of the key elements of planning is using 3rd parties that can help you confirm your assumptions and give you direction on how to proceed with your product.
Key Elements to Planning: 3rd Party Validation
- Thought Leaders in the industry
- Professionals (Lawyers, accountants, etc…)
The validation of your idea gives decision makers such as funding bodies a reason to choose you instead of your competitor.
Getting Out There
In the “Knowing Your Market” video, Howard stresses the need to not only know your industry’s market from reports, but also go out to your market’s environment. For him, he went to hospitals, doctor offices, and any place that provided health care. You need to see how your market perceives your industry and its services and to delve deeper into your customers’ true needs. Howard says, “Just because someone says they need something, doesn’t actually mean they need [it], that’s what they perceive they need.” By going into these markets, you test those perceived needs and compared them to the real needs.
Getting out there and testing your product gives you an excellent opportunity to see what changes you need to make. What you think is simple to do, the user might find confusing and difficult. “Knowing how to evolve [your product] for the marketplace and [for] the changing marketplace” becomes an ongoing process in your product development.
It never really ends
Research never really ends. Even when the business plan is written, research continues as you build upon all the knowledge you have accumulated over time. For any new market you enter, a new business plan has to be created, researched, and validated.
Part 1 – Writing out your business plan
Part 2 – Knowing your Market
Blog contributor: Helen Kontozopoulos @helenissocial
In this week’s video series, Diane Davy from WorkInCulture presents information about how business planning can help the grant application process for Canadian content creators within the mobile sector. Diane’s three videos are also good primers for anyone who is in thinking about applying for a grant.
A large part of applying for a grant is having a strong and compelling business plan. It demonstrates to funders that you have strategies and objectives in place, that you possess a deep understanding of the market, the customer, and the business environment, and that you area able to deliver on that plan.
A business plan is a “description in words and numbers of your business with a focus on the future” Diane says. Seems daunting? It is the most time consuming aspect of the grant application process, but it will be the best time spent when developing your business. Give yourself the time to do the research and to write a cohesive and compelling plan. If you do, you will impress your funders.
Parts of a business plan include the following:
- Mission Statement “Why does my business exist and for whom?”
- Goals “Where are you trying to get to?”
- Strategies “How are you going to get there?”
- Outcomes and Measurements “How will you know when you got there?”
- Financial Information “What will it all cost?”
“Why am I in business?”
The first part of your business plan is your mission statement, it is the guide for your plan, helping you make decisions through each section, bringing it all together under one focus defined in the beginning. When first writing your mission statement, Diane asks business to ask themselves the question: “Why am I in Business?” It’s for you to create a clear answer, to know what you are offering and it’s benefits and how it will bring value to your customer.
Understanding your market
You need to further prove that you understand your market and be able to clearly define your potential customers, in demographic terms, and their “wants or needs” says Diane. This is where taking the time to conduct research for your plan pays off. You need to be able to define your market, its size and potential, and your value proposition to differentiate your product/service within the marketplace.
Research is where you will gain the insights you need to develop your plan. You can use various tools and techniques, such as surveys, social media inputs, past project research, and online reports that you may quote to send a strong signal to funders that you understand the market you are entering. The goal of all the research is to prove that there is a real need to what you are offering.
Funders are like investors
When creating your financial reports for your business plan, Diane suggests taking the perspective that the funder is an investor. Funders take your numbers very seriously and so should you. They are investing in the future success of your business based on the numbers and the plan you are showing them. Some of the financial statements you might need include, profit and loss statements, short-term or/and long-term forecast statements, and cash flow statements. If you’re not strong with numbers, hire a financial expert or advisor to help you with this section.
Matching up your stories
The most important part of the plan as Diane points out, and many miss when creating their business plan, is that the two main parts of your must fit together. You need to make sure that “the story you are telling in numbers matches the story you are telling in words,” Diane refers to the written parts of your business plan versus the financial statements. If you are asking for something in the first part of your business plan and it doesn’t match what you are asking for in your financial statements, then there’s a disconnect and the funders will not approve of your grant or loan. Both need to work together to create a successful plan for your business.
Your plan is there to prove you have a product or service that a target market wants or needs, and you are able to deliver if you receive the grant you are applying for.
Diane has some great examples about the parts of a business plan in her videos, check them out on our Mobile Ex YouTube channel:
Part 1: Tips for Business Planning
Part 2: Marketing Strategy
Part 3: Grant Writing
Blog contributor: Helen Kontozopoulos @helenissocial