Now that you’ve learned about the core teams of a business, let's review the intangible pieces of a business, your business traits. Although they are abstract concepts, without these traits, a business is just a group of people with no cause or direction.
Let's start by discussing your industry and market size. Each industry is a distinct group of enterprises, classified by the target market and types of products or services offered. View the bottom of this post for a list of industries. Understanding what industry your business operates in is crucial. This knowledge guides you in researching why others in your industry are successful and what success can look like for your business. By knowing your industry, you can observe how similar businesses are chasing success and analyze current and future trends.
Your success is dependent on the monetary size of the market and how much revenue within that market is available for your specific product or service, called your Total Addressable Market (TAM). You can find your TAM through either a bottom-up or top-down method. The top-down method involves multiplying your industry's total market size by the market share of a successful business in the industry. Market share represents how much revenue your business makes compared to the total revenue of your industry, usually represented as a percentage. Alternatively, through the bottom-up method, you multiply the price of your product or service by the typical number of customers for a successful business in your industry. The top-down method is less specific to your business but helps to gauge potential success. The bottom-up method, however, provides a more accurate value of potential success based on current pricing. Both methods can help you visualize your future success and determine if starting your business is the right decision for you.
If you decide that the effort of starting a business is worth it, the next traits to iron out are your vision, mission, and values. These intangibles are the core of what drives your business. Your vision describes what you want to ultimately accomplish, while your mission describes how you will accomplish your vision. The mission statement usually includes what market you plan to compete in and what products or services you plan to offer. If you don't have a vision and mission, you don't have a direction or know how to get to your end destination. Your values will further refine how you will reach your goals, as they are principles or standards of behavior that are foundational to your company culture and decision-making.
Your First Impressions
The next set of traits to tackle are your company name, website, and social media usernames. These may seem insignificant, but they represent your company to the world and are often the first thing someone learns about your business. As the saying goes, “first impressions are everything, and they only happen once.” You should base your website on your company name, and try to pick a name that is memorable and short. To help with the name, see if your industry, product, mission, or values can get your creative juices going. Although it is important to be memorable, make sure people can pronounce and search for your name easily. When picking your URL and social media usernames, you may find that it will be too expensive to get the exact name of your business. A helpful trick is to append something like “start,” “go,” or “now” to the front or end of your name, so you can get a low-cost URL and set up a social media presence. You can always go back and get the real deal when you have a bigger budget! You can use name-checking sites (https://www.namecheckr.com/) to see what domains and usernames are taken. For some businesses, a website and social media presence may not be needed, but they can certainly help in promoting and sharing your business with others.
Next week, we will be covering the last intangible that helps you measure success, your KPIs.
"What you get by achieving your goals is not as important as what you become by achieving your goals."
- Zig Ziglar, Motivational Speaker and Author
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