With the economy teetering on heading into a severe recession, conventional wisdom would be that its time to pull back, to hang onto scarce resources. I disagree in one very important way. Now is the perfect time to start exploring that new business idea you’ve been thinking about for the last couple of years, especially if the business is web or app-based or involves the delivery of services into the customer’s home environment.
The Covid pandemic is an opportunity in disguise. If you have been furloughed or laid off, and if you have a computer and an internet connection, now is a great time to get started on that business idea. This blog post is essentially a crib sheet on how to go about it.
Use your Covid19 downtime to do the following:
– Think through how to make into reality that business idea that’s been floating around your mind the last few years. Come up with a simple game plan. The plan needs to be simple to allow you to flex or pivot as you road test your idea.
– Create a business model. Figure out how you are going to make money, and how secure your revenue model is (in theory). Are you dependent on people walking through your door or finding your website, or do you have a targeted audience you can readily tap for your early sales?
– Create a business plan. There are a number of business plan software programs available on line. I have used Live Plan, and it has worked well for me. (I have no relationship with Live Plan, business or otherwise.) Business plan software will help you think through income streams and costs of doing business, including labor costs.
– Evaluate what you have. Is it realistic? How does the money look? Do you need more information? You have time to scrape the internet to find what you need.
– Now, either (a) scrap what you’ve come up with because the money doesn’t work or you find that as you dig into it, you are really not that interested in the business or in doing the work it will require, and go back and restart with another idea, or (b) put on your creative hat to start on next steps.
– Come up with a name for your enterprise. Caution is in order here! You will want to choose (or create) a name for which you can get a top-level internet domain (.com, .org, etc.) and, if one day you wish to do so, a trademark. Finding a business name that allows you to both acquire a top-level domain and have a clear path to trademark registration can be tricky.
– Check existing federal trademarks to see if a name like the one you’re thinking of has already been applied for or registered. To do this, go to https://uspto.gov, click on the “Trademarks” tab, click on “Search Trademarks”, click on “Search our trademark database (TESS)”, and then do a Basic Trademark Search on the name you want. If your search shows that someone else has already registered, or applied to register, the name, look to see what channels of commerce they have registered or are registering to use the mark in. The International Classes are used to denote channels of commerce. Look at the International Class numbers and descriptions. If the market channel is very different from the channel in which you would put your goods or services for sale, you likely have a reasonable chance of obtaining a registration. If your market channel has any overlap at all with the international class(es) of the registered or applied-for mark, it’s best to start over and find a different name. Be sure when you do this analysis, you also run searches on other spellings of the name you want, as well as homophones (names that sound the same but that are spelled differently) and substantially similar – but not identical – names. For trademark purposes, “We” Company is the same as “Wee” Company is the same as “Wii” company. Disregard incidental words when evaluating previous registrations or applications. To continue with the previous example, “The Wee” Company is the same as “The Best Wee” Company or “The Big We” Company.
– Once you have selected a name that passes muster, you can move forward with your creative work and start to think of ideas for a logo and company colors. There are lots of logo creation sites on the web. Most of these sites require you to pay to actually download the logo you create, but that part is up to you. In the meantime, you can try on all sorts of images and color schemes to find one that seems to you to be a good fit. If you do come up with something you love and you are willing to pay the fee, you will have the start of your new company’s brand identity. True creatives can help you refine your logo and branding ideas as you move forward. The only thing that is really hard to change is your company’s name.
– Now that you’re armed with a business plan and basic brand identity, you are ready to start soliciting feedback on your idea. You do this through what’s called “customer discovery”. Lots of people are at home right now, working as best they can. Most will have more free time that usual to talk with you about your idea. Call the people who would be your ideal customers, and ask them what they think about a theoretical product or service like yours. In doing these interviews, you want to create a script so you essentially ask many people the same (or very similar) questions, and compile the answers. Your script should be designed to get feedback about how you propose to go about solving whatever problem you’re solving with your product or service; it shouldn’t necessarily ask for feedback on the product itself. So, for example, start with the problem, and ask people how important finding a solution is. If finding a solution is important, ask if they have ideas on how they would solve it. If finding a solution to the particular problem is not very important, try to tease out what would be required to get someone to actually use or pursue a solution. You want answers to these fundamental questions to ensure there will actually be a market for your product or service. If people aren’t particularly bothered by the problem you’re trying to solve – of ir your product or solution doesn’t solve anything at all – you may find you don’t have much of a market. If this is the case, better to know early before you invest a lot of time and money. This is why customer interviews are so important! Your interviews may also give you ideas as to how to better position your product or service in the market, or even on how to improve the product or service itself. When working on customer interviews, plan to do a minimum of 50. You can always do more if you are finding them helpful, but 50 is about the minimum.
– Once you finish your initial round of customer discovery, take another hard look at your product or service. Change what needs to be changed. Update your business plan and financial projections to reflect the changes.
The above steps will take you about a month, maybe 6 weeks. We are 6 months into this pandemic, and by all accounts, it looks like it will be getting worse before it gets better. Things may be getting back to normal in a month or two, but, then again, they may not. Regardless, if you explore your business idea by taking the steps outlined above, you will be light years ahead of where you were when you just had an idea.
If you still feel you have something valid at the end of the customer discovery process, you will be ready to start investing real time, money and energy into developing the product or service through development of a prototype or minimally viable product (MVP). Maybe being called back from furlough or being rehired after a layoff doesn’t look so enticing anymore – or maybe you strategize to leverage your return to work with the idea of working toward a full-time commitment to your fledgling product or service company. No matter what the outcome, using this downtime to pursue something that excites you is likely to broaden your horizons.
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.