The Critical First Step For Starting a Business - Ignore at your own risk | Ken Vernon | Skillshare

Playback Speed


  • 0.5x
  • 1x (Normal)
  • 1.25x
  • 1.5x
  • 2x

The Critical First Step For Starting a Business - Ignore at your own risk

teacher avatar Ken Vernon, Life Lessons for Small Business

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

9 Lessons (26m)
    • 1. Introduction

      3:36
    • 2. Optimism Can Sabotage Your New Business

      3:25
    • 3. The Primary Factor of Failure or Success

      2:14
    • 4. Three Key Questions

      2:04
    • 5. Target and Research

      2:56
    • 6. Get Direct Input

      3:31
    • 7. Document It All

      3:18
    • 8. Review

      3:03
    • 9. Next steps

      1:50
  • --
  • Beginner level
  • Intermediate level
  • Advanced level
  • All levels
  • Beg/Int level
  • Int/Adv level

Community Generated

The level is determined by a majority opinion of students who have reviewed this class. The teacher's recommendation is shown until at least 5 student responses are collected.

81

Students

--

Projects

About This Class

In this class we are going to provide a roadmap for developing critical insights that will help you determine if your new online business idea is more likely to succeed or fail before you invest significant amounts of time and money in your idea

This class will take you step-by-step through tried and true processes for identifying, understanding and evaluating the market for your new business idea.

 In this class we'll cover:

1. Motivations to start a business

2. The risk of starting a business

2. How to mitigate that risk

3. Identifying the opportunity or lack of

4. Understanding your customer

5. Create detailed customer profiles/personas

5. Engage and get direct input

6. Document all research for go-or-no go analysis and decisions.

This class is perfect for: 

Anyone that is thinking about starting their own business or has already started down the path of starting their own business. This class will jumpstart your critical thinking about your business concept, the market for your concept and the likelihood of success or failure of that business concept.

What you'll need:

Internet access

Access to Google Docs

About Ken Vernon:

Hi, I'm Ken Vernon. I am a life-long small business entrepreneur. Over the past 30+ years I have started and managed over 15 new businesses. I have started businesses in multiple industries, but the last 4 were marketing agencies, giving me an unique understanding of a wide range of businesses and industries that have been clients over the years.

Now, I am sharing my real life experience with the hope that others can learn and gain value from my successes and failures as a small business owner.

Meet Your Teacher

Teacher Profile Image

Ken Vernon

Life Lessons for Small Business

Teacher

Ken Vernon - Founder, Life Lessons for Small Business

I am a life-long small business entrepreneur. Over the past 30+ years, I have launched and managed over 15 different businesses, from vending to restaurant and live music venue to online marketing initiatives for big brands.

If you are starting your own business or just thinking about starting your own business, follow me and I will help you avoid many of the roadblocks and struggles that you will face as a small business entrepreneur.

Here's a short list of some of my experience in reverse chronological order:

In 2019, I was the lead marketing consultant helping a large nonprofit in the Northeast utilize digital marketing automation tools to significantly increase donations. Started and m... See full profile

Class Ratings

Expectations Met?
  • Exceeded!
    0%
  • Yes
    0%
  • Somewhat
    0%
  • Not really
    0%
Reviews Archive

In October 2018, we updated our review system to improve the way we collect feedback. Below are the reviews written before that update.

Why Join Skillshare?

Take award-winning Skillshare Original Classes

Each class has short lessons, hands-on projects

Your membership supports Skillshare teachers

Learn From Anywhere

Take classes on the go with the Skillshare app. Stream or download to watch on the plane, the subway, or wherever you learn best.

Transcripts

1. Introduction: According to the Small Business Administration, about 20 percent of new business startups fail in the first year, that's 15. So whether you're in the process of starting an online business or a brick and mortar business or developing new product idea, there is one step that you can and must take if you want to avoid being one of the new businesses that fail in that first year. This is the most important step that you can take to ensuring both short-term and long-term success for any new business on loud or otherwise. And that step is simple. You need to validate your new business idea. And the only way to truly validate your new business idea is to do it with the actual people who would be most likely to need and most likely to be willing to pay for your product or service. In this class, I will show you step-by-step how to do just that. And you can go a little further with this information and it will show you how to build a foundation of customer knowledge that can help you capture, convert, and retain your customers for your business. My name's Ken Vernon and I've started and manage more than 15 new businesses in the past 30 years. And I'm here to share the last lessons I have learned as a small business entrepreneur. My goal is to help you succeed with your new business by avoiding many of the landmines and issues that are faced. Building those 15 businesses, some of these businesses are built generated multimillion dollar revenue streams file, some were complete failures. And one of my most painful and expensive failures was an online product that failed as a result of me not putting in the time and effort to validate my idea with the actual target market led my ego and input from those close to me cloud my decision and my decision to not go through with the research and validation efforts discussed in this class cost me a full year of Tom and a significant amount of investment capital and knew better. And I still made this mistake. So I put this class together because I don't want you to make the same mistake I did. This class will help you either avoid a business failure or go forward with confidence. So we'll go over six topics in this class. Optimism can sabotage your startup. The primary factor of failure. The three key questions you must answer, target and research. Get direct input and documented all. If your research doesn't indicate success for your new business, you can decide whether to step away from this idea completely or to make changes to the ADEA and try again. I have personally thought many of the battles and conquer many of the challenges that you will face as a small business entrepreneur. And I am committed to sharing all of my experience to help your small business startup succeed. But I also want your input on whether this class was helpful or not and your thoughts on how to improve the class to be more beneficial for small business entrepreneurs like your sale. So please take a moment to please take a moment to provide a review with your input and follow me here on Skillshare to be notified at the post more lap lessons for small business in the future. Now let's get started. 2. Optimism Can Sabotage Your New Business: The number one reason people give for wanting to start a business is to be their own balls. And a lot of people express this desire to be their own boss, but most will never actually take the leap. But when someone with the desire to take control by starting their own business family decides to take that leap. There is usually a tipping point or a situation that drove them to go for it. Many times the C for this tipping point starts when they share their business idea with someone. And the response that you get is, Wow, that's a great idea. Then the wannabe entrepreneur hears that and it immediately becomes part of their inner dialogue, supports that new business idea. They become optimistic that they could actually start their own business with this idea. This scenario is usually repeated with various friends, family, and coworkers, and every positive response drives their optimism higher. Unfortunately, many entrepreneurs become overly optimistic and they let that optimism cloud their judgment. They become convinced that they actually do have a great idea. They just can't miss their optimism that there are new business can't fail, drives them to move forward without taking the effort. Do the market research and data gathering that is required to truly validate this new business idea. While optimism is generally a valuable trade for entrepreneurs, optimism without a certain level of pessimism can become a fatal flaw. A 2018 study conducted by researchers at the London School of Economics found that overly optimistic folks are more likely to start. You'll can see businesses that are doomed to failure from the start. These failures begin when the entrepreneur bases their initial business decisions on an overly optimistic view, their new business idea. This over-optimism is one of the motivating factors that drive people to go all in on their idea without taking the critical step of conducting a sufficient level of research with the actual target market for their new business idea. The friends, family, and coworkers that tell them that they have a great idea and most likely don't fit the profile of the actual customers and their input will always be bias. So to ensure the success of any new business idea, it must be validated by individuals who are actually in the target market for that business. If you become overly competent and decide not to conduct a thorough market research initiative, you are gambling that your new business will succeed. And let me tell you, the odds are not in your favor. Business experts all agree that executing a well-planned market research initiative is the critical first step in determining the validity of your new business idea. With your participation in this mini class, you are taking the important first step to ensure your new business idea has the best chance for success. 3. The Primary Factor of Failure or Success: If you take the time to execute the tactics in this class, you will gain critical customer insights and information that will give you an understanding of the potential for success or the likelihood of failure of your new business. With this knowledge and understanding, you are then empowered to avoid the number one factor that takes many new businesses down. The number one factor that influences success or failure of a startup was identified in research conducted by Bill Gross, the founder of idea lab, and he presented that as a TED Talk in 2015. Idea LAB is a business incubator in California, started by Bill and 1995. And since then I deal AB has incubated over 150 companies. From those experiences, Bill wanted to determine what had the most influence on the success or failure of a new business. He looked at different factors that he felt could have the biggest impact on success or failure. Those factors were the business concept and idea, the business operational model, the level of funding, the management team and timing to market bills research included all of the Idea Lab companies plus an additional 100 startups that were not associated with ideal lab. And in the end, his research concluded that timing to market was the most influential factor in determining the success or failure of a new business. Timing to market had more impact on the success or failure of a business than the concept, the management team, or the amount of funding, and even the execution day-to-day of that business being successful based on timing to mark, it means that when the company launched, there was an accessible market of customers that had a need for that product or service. And they were willing to pay for it. 4. Three Key Questions: In order to determine if it's the rat time to bring your product or service to the market, there are three vitally important questions that need to be answered. The answers to these questions must be honest, unbiased, and backed by your market research. Question one is, is there an identifiable and accessible market that has a need for the product? Now this is a three-part question. Can you identify the market? Can you access the market with your marketing and advertising? And do they have a need for the product? Now question number 2, or those who have the need willing to pay for it. And number 3, are they willing to pay a price that includes a sufficient profit? If they're not, your business cannot survive. So if you do the market research to answer these questions, you can then project a level of either success or failure for your new business. Now let me say that again. If you take the time to do the research to answer these three questions, honestly, you will have an understanding of the probability of success or failure of your new business. Now, if it looks like it's a no-go, you must keep in mind that a no-go decision may be the best decision you'll ever make, saving you time, money, and pain. So trust me, if a no-go decision is the right decision with highly recommend that you accept it and move on. But if the answer is yes to all three, you then have the confidence to go forward with the next step on your journey to your new business. 5. Target and Research: Let's start with identifying your primary target market. It's imperative that you do this outside of your personal network of friends, family, or colleagues. As I discuss, most entrepreneurs will first convince themselves of the value of their idea and then they proceed to convince those and their circle of friends and family that the idea has value. The positive feedback from friends and family then feels unwarranted optimism in the new business idea. Your friends, family, and business associates can easily become an echo chamber of false positive or false negative input. So to determine the validity of your new business idea, you must engage with the individuals that you believe will benefit from or be a customer of your new business startup. The first step is to actually identify that market and you start that process by simply thinking and documenting who you think your primary customer would be. Use your knowledge and experience along with basic research tools to help you identify a primary target market for your new business. Who is the person most likely to have a need for your product or service? And what need do they have that your product or service will solve? Your goal is to identify one or maybe more potential target markets. Then you will do the research that will give you the inside to start building a profile or persona of your ideal customer that in your target market, you want to know as much as possible about them. For this research, there are multiple sources that you can utilize and some of the primary ones or demographic data from the US Census Bureau, social media audience data tools such as Facebook audience creation tool or LinkedIn Campaign Manager, trending topics and search with Google trends. And to get saccad graphic data, you can look at resources like Doritos. And if you need industry bar data, then look at any industry resource that you can find. As you do the market research, you should be able to determine the market with the most need for your product, their actual level of need, and what they are doing presently to address that need, and what Matt convinced them to use your product or service. If you take the time to fully identify and document the demographics, the characteristics, the needs, behaviors, attitudes, motivations, and challenges of your ideal customer. You will now have a holistic view of that ideal customer. And you can work with that to find those were those customers are, and engage directly with them to get input. 6. Get Direct Input: If your research indicates that you've identified a target market and that may have a need or an interest in your product. And they are in a segment, should be able to pay for your product and service. Then you need to engage directly with the people who are representative of that market and get their response to your brand message or product. In order to get direct input and important step is to document your new business idea, concept, or product in a format that can be presented to individuals. This can be a simple PowerPoint presentation. You can convert that PowerPoint into a video for them to get input from, or simply print it out to show in low tech environment, if your ideas of product, obviously the most optimal presentation would be a prototype. But keep in mind the goal is to get initial input without significant investment or risk. Be careful about how much time and effort you put into your initial presentation of your concept because it will change once you have an overview of your concept, getting in front of individuals in your target market for input and response, your goals should be to get direct input from those individuals. You want unvarnished input, not influenced by what others say in a group setting including social media. Now, social media can be a great low cost or even free way to engage your market for input. But always focus on getting direct individual input and remember people to get their opinions. Facebook's a great place to start. And the first step would be to find Facebook groups that mirror your target market. Join and participate in the conversations in those groups, always trying to add value. And as you participate in these groups, you should be able to identify and directly approach individuals to ask for their input on your new business idea. You'll want to develop a list of questions and topics. Do you want the input on starting with their need and what they think of your product or service, and how that product or service could fulfill their need. And then going all the way to what they would pay for a solution for their need or for your actual product. You can also create your own Facebook group and recruit those in your target market to participate. Additionally, with a small investment, you could utilize Facebook ads to drive engagement with your target market and encouraging them to take a survey or to answer a few questions. All social media, instagram, Twitter, even TikTok and Snapchat can be utilized in a similar fashion to engage and get input. If you're developing a product or service to sell to other businesses, you can use LinkedIn and execute similar tactics, participating groups and discussions in order to identify the individuals on LinkedIn for input. And if your business concept is retail or a restaurant, the best thing for you to do is to get out there with a clipboard and engage with customers of similar businesses. All you have to do is look professional, engaged politely and ask. Most people are more than willing to share their opinions or experiences. 7. Document It All: As you engage with individuals in your target market and gather input, it is imperative that you document everything in detail. I provided a Google Sheets template for capturing the input from individuals in your target market. So make a copy of this template and use it to log all of your input that you get in your research and engagement efforts. Your goal is to understand the needs of your customers and if and how your product or service can address those needs. If the input is negative, you need to know what you can do to improve your product in a manner that would turn the customer's perception around to be positive about your product or service. And if you're utilizing the persona or customer profile template that up for added to create a realistic representation of your target market. Be sure to update that with any additional information found when engaging and getting input directly from the individuals in your primary target market. In addition to your target market research, I also recommend that you take the time and make the effort to compile an overview of the market landscape that you intend to compete in, including any direct or related competition that you found. You'll want to know who the competition is. What are their real or perceived differentiators and how are they messaging to your target market? As a best practice, I would recommend conducting your competitive research before you engage directly with individuals in your target market. This will allow you to include specific questions to help you determine how your competitors are perceived by your target market and what you could do to be seen as different and better. I've also provided a Google Sheets template for capturing this competitive research data. Customer profiles or persona's that you've created along with the detailed input that you've obtained through direct engagement with individuals in your target market. Provide you with a clear view of the potential or lack of potential for your new business. Remember, if your research indicates failure, do not hesitate to halt all of your business efforts immediately. Do not let your ego or false optimism cloud that decision. Avoiding the pain and loss of a business failure is invaluable if they input gathered in your research is positive. Now move forward with confidence that you have a chance for success. Market research that indicates your business will succeed can also be used to support any investment or partnership efforts that you undertake. As you move forward with your new business, I strongly encourage you to utilize your research to support or influence all of your business decisions. With this document and research, you will have the foundation of a customer centric business. If you build on that foundation through ongoing customer engagement and input, you will have the opportunity to build a successful, profitable, and long-lasting company. 8. Review: So let's review. If you take the time to execute the tactics and strategies I just presented in this class, you will have identified customers most likely to need and purchase your product or service. You will have done the market research to have a good understanding of that customer's wants, needs, and preferences. And you will have a documented all that in a detail persona or customer profile. You will have engaged with individuals that fit your customer profile for direct input on your product. And validated that there is a market with a need for your product and that is willing to purchase your product at a price that includes a level of acceptable profit. With this knowledge and input, you are now equipped with a solid understanding of what your customer wants. And you have input on how individuals in your target market perceive your product. With this information, you are now equipped to make an informed decision on whether to go forward with your plans, open this business or shut it down, or go in a completely different direction. This is the critical decision you must make at this point. But armed with this customer knowledge and input, you can determine the probability of success or failure of your new business idea. And if the indications are that your new business will succeed, you can confidently move forward with launching this new business idea. And you'll have a solid foundation of customer knowledge and understanding that will help you drive customer focus, product development, marketing, and messaging. Working from your customer's viewpoint will always give you the best chance for converting leads into customers creating the opportunity for survival and success of your new business. Now, if you have any questions or comments about validating your new business, I did. Don't hesitate to reach out. I will do my best to respond and assist in any way I can in helping you succeed with your new business idea. I'm Ken Varner when and my e-mail addresses can add laugh lessons for business.com. That's last lesson, the number of for business.com. Now I have one favor to ask. I really want to hear your input on the class you just watch. So please take a moment to leave your review of this Skillshare class and be sure to follow me here on Skillshare. And remember, working from your customer's viewpoint is always the best path for success. Now, if you're ready to proceed, the next video provides an overview of the class, including the specific steps you'll need to take in order to know if your new business idea will be a success or failure. And don't forget to download the templates in the PDF provided. Best of luck to you and don't forget to review the class and follow me here on Skillshare.