Three weeks? Sure, why not? I know very well one business that started in a single day. Here’s that story, from my Planning Startups Stories blog. It’s about Palo Alto Software, which now has more than 40 employees, more than 70 percent market share in the U.S. retail market, a subsidiary in the UK and a new management team.
I also posted about this three weeks idea last April in “Can You Really Start a Business in Three Weeks?,” also in Planning Startups Stories. I said it depends a lot on the business: how big, how technical, how much financing it needs, how many people are involved, etc.
Today, as I focus in on the final edited version of our new book 3 Weeks to Startup, I’d like to look at this again. Our editors have asked us to go back and build the timeline, realistically, to prove the point that you can do this. I think we can do that easily.
Here’s what we suggest as the stuff of week one.
| What you really have to do, no matter what–the essentials | Notes, comments, and why this is either week one of three or before that. |
| The main idea. Is there a there there? Does anybody need (or want) what you’re selling? How will you focus?
Think of it as including market focus, product focus and strategic focus. Dealing with displacement, accepting that you can’t do everything and you can’t please everybody … so what do you do, and whom do you please? |
Actually, you do this right away, and always. And don’t think it doesn’t change constantly, either. So it’s before week one and during week one and forever after. You’ve probably already started this. You think about it a lot. This is really more right now than week one.
And for some people and some plans, it’s more than just talking. You probably know who you are. If you’re laying out a lot of money, and especially if it’s somebody else’s money (like investors), then you also need to take the extra steps to generate more market research, meaning doing the reality check and proof to outsiders that there is a market there. In that case, you might not be able to get it all done in three weeks. For now, during week one, get started on it. |
| Line up the people and talk about the tough topics, who owns what and why, who does what and why, as if you were thinking about getting married. | Here, too, you’re probably doing it already, before the three weeks to start. Still, let’s call this week one anyway. |
| Get it in writing. Unless, of course, it’s just you–in which case, save your time. | That’s between you and your fellow founders at this point, not legal yet but building the foundation. Your attorneys will use it to ask the right questions, then revise; but for now, it’s getting everybody on the same page. |
| Name the business. That might be just using your own name, but usually it’s more than that, including not just coming up with the ideas but also checking them for availability and doing the registering required to make it legally yours. | This can be a tough one, but necessary nonetheless. As per my post yesterday, you don’t have to name the company and the domain name at the same time. And they don’t have to have the same name. (Palo Alto Software, for example, sponsors bplans.com, where business planning information is free.) |
| Initial sales forecast. It won’t be right, it won’t be accurate, but you can’t start managing without it. Just get an idea. You’ll have plan vs. actual comparisons soon enough. | Some people dread the forecasting, but give yourself a break It’s just too hard to plan and start a business without a sales forecast, a sales goal. How can you estimate expenses without a sense of what sales will be? How can you estimate your initial cash needs, as part of your starting costs, without a forecast of sales? |
| Initial expense budget. A simple spreadsheet. Include payroll, rent, insurance, marketing costs, etc. | As with the sales forecast, you owe it to yourself. You need to know. You can’t manage a budget if you don’t have one. |
| Estimate starting costs. Including expenses incurred before startup, assets such as equipment and inventory, and the all-important initial cash balance (alias the cushion, but not if your investors hear you using that phrase). | Most of this is just two simple lists: expenses you’ll incur and things (assets) you’ll need to have. The harder part is estimating how much cash you need to have in the bank to support the company through the normal drain period during the early cash-negative days. That, by the way, is yet another argument for doing the sales forecasts and expense budgets. |
| Make the sale. That is, if you can. Some businesses (consulting, graphic arts, for example–some, not all) start up when the first client says yes. If that’s the case, then it’s week one for sure. | And this is just a reminder that sales covers a lot of other failings. Today, tomorrow, first week, every week, think sales. You’re already doing this if you can, so of course it belongs in week one. There’s nothing like a pre-startup sale to ease the pain of raising startup money. And then it goes on for the rest of your business’s life. |
So that, for most businesses at least, is what I’d suggest for week one of the three weeks to startup. You may notice that I’m skipping over some of the market research that many people would say is vital. I’m saying, in contrast, that if you already know your market and what you’re going to offer, and why and to whom, then you’re like a lot of other entrepreneurs. You’re not going to do a big market research project. So let that one go unless you need it. And as I suggest in the table, if you need it, you already know who you are.
So this is week one of the three weeks to startup. Week two of three comes in my next post.
{ 0 comments }
Subscribe via RSS