26. February 2018
Find a gap in the market and disrupt it with an innovative product. Sounds great, but how to create a working business plan, determine numbers and validate the product? These are the most frequent questions that entrepreneurs ask us.
How can my project earn money? How should I create a business model?
The business model should be based on the main goal of the project. It should monetize on its strengths and reflect demand of the market. You need to think about what is best for your product or service in terms of production, promotion, distribution, and pricing and create a business model based on this. We recommend that you review how competitors and other companies that have similar products monetize their products/services.
I did not study economics. How do I do the calculation in the business model?
The basic calculation, which includes revenues, costs, and target margins, should be counted by entrepreneurs themselves. Inputs should be based on your estimate, available statistics, comparisons of numbers from similar industries, and consultations with experts.
To build a comprehensive business model, you can hire a financial consultant to help you fine-tune the plan, but it is optional. You should always try to make the financial plan in the simplest and most comprehensible way possible so that you can understand it well. Only then will you be able to answer any questions from investors.
How do I validate my product?
Validation differs from project to project. It is crucial to get the product to the initial mass of potential customers, strictly speaking your long-term target group. These people are called early adopters. If people are interested in your project, great. If not, you need to target differently.
Keep in mind that the product will need to be changed several times. Therefore, always work with the minimum necessary variation of your product or service which you are going to introduce to customers. It is called the MVP = Minimum Viable Product.
Where and how do I find my competitors in the market and how do I compare myself with them?
First, make a detailed research on the Internet. At the same time, try to get feedback from your potential customers (what other products they are purchasing and why) and from your suppliers.
Who can help me with all this?
You can turn to your family, friends, experienced people from the respective industry, and independent experts for help. If you manage to have your close people help you with the first steps of the project, it will be a good signal for the investor.