We continue our discussion of what constitutes a good business plan. If you missed the first installment in this series you can find it here: http://pgentile.com/?p=47 . It is suggested that to get the most out of this series, you should read these short episodes in the order in which they were written. That way you’ll get a real feel for the flow of a business plan and, for an added bonus, the later installments will make more sense; each installment builds on the articles that came before it.
We’ve already discussed the first step – what is the problem or need you have identified? Hopefully you have been able to articulate not only what the problem is but also able to back up your statement with some evidence. Remember, “articulate” or “back up” means “put it in writing”. All of these steps call for the business owner and executive director to write out their response to each of these prompts during the business plan process. The writing process forces you, the owner, to describe the problem you see as well as your solution to that problem; the process is a tremendous asset to you in crystallizing the core of your business. Like the spokes on a bicycle wheel, every other aspect of the business plan will flow from these two core points (the hubs): what is the problem and what is your solution? Without those hubs your business wheel will likely collapse with the slightest pressure.
What is the Solution?
Up until now we’ve been focusing on the problems, needs and gaps in our society that need fixing. That’s key because if people don’t see a problem, need or gap they are unlikely to buy your product or services on a sustainable basis. Now that you’ve identified the problem and educated others that the problem exists and needs fixing, it is time to present them with your “fix” to the problem.
At this point you as the entrepreneur and world-changer have your opportunity to explain your solution to the problem previously identified. The floor is yours and the spotlight is on; how does your idea, your product or your service solve the problem? Be specific.
Let’s look at some examples. Suppose the need you’ve identified is a lack of artisan breads in your community and the surrounding area. People like good, homemade, fresh-baked bread and there isn’t a baker filling that need in your area. You already enjoy baking fresh bread for your family and a few friends and you’ve gotten rave reviews. So you think … maybe I can make a living doing this? Your solution is to bake breads and other home-cooked delicacies and sell them at farmers markets, festivals and through word of mouth.
Here are two other examples of problems identified and the proposed solutions. Everyone knows about the climate change and environmental problems facing our planet. However, there is also an ever-increasing demand for energy. How can we create a sustainable, reliable energy source while helping to reduce our carbon footprint? Two different solutions are presented for the same problem. First, one company decides to open a used vegetable oil cleaning and processing business. The company would take used vegetable oil from restaurants, that would otherwise end up in a landfill, and process it to be used as a biofuel. The biofuel could be used in lieu of diesel fuel for cars and trucks among other things.
Second, another company opts to take leftover organic waste (e.g. food scraps) from restaurants and grocery stores that are headed for landfills and use it instead at their facility; at the facility, the organic material is mixed with bacteria which eats the material producing methane gas (which is used to fuel electric generation plants) and the solid leftovers are used as agricultural fertilizer.
The solution does not have to be elaborate or technology driven; the simpler the better. The solution just has to be your answer for the problem you’re addressing.