The lean framework for a startup is the de facto framework that most startups utilize to evaluate and cultivate the growth of their businesses. According to William Schantz, a lean startup method helps businesses determine if their product or service idea will be successful in the marketplace without spending all of their money or resources upfronts.
Once you’ve determined that your business idea has merit, you can then decide whether it’s worth investing in and hiring new staff to grow it. This means that you don’t have to waste time and money on products or services that consumers don’t want – an invaluable benefit when you’re operating on a tight budget or running your business on the side.
William Schantz’sTips on How to Start a Lean Startup Within Your Business
1. Problem and Solution
Many small businesses struggle with determining whether or not their concept will appeal to potential customers. To avoid wasting time and money, it’s best to get out of your head and talk to actual customers as soon as possible.
Schantzsuggests that a problem-solution statement may be an efficient way of telling your business story concisely. The basic idea behind a problem-solution statement is that you briefly describe what problems your business solves for its customers, then provide a solution.
Testing your assumptions with an MVP helps weed out businesses that will fail from those that will become successful. It saves you time and money and reduces risk by giving you validation before moving forward. William Schantz believes that a business without customers has no chance of surviving. If you test your ideas early on, they stand a higher chance of success, which lowers financial risk and personal stress levels. This means it’s more likely that your idea can be implemented well (with minimal tweaks) or even turned into a franchise!
After you’ve launched it, how do you know whether it’s working? Schantzsuggests that the first step in validating your startup idea is determining if there really is a problem that needs solving. Once you determine there’s an actual needand someone will pay money to solve it, validate by showing that they would be willing to give up some money in exchange for your product or service. This can be done through surveys, focus groups, beta tests, etc.
For example,You want to create a new software program that helps people organize their lives better – so you test out your software with ten people who are willing to pay $5/month for it. If four of them stay subscribed after three months (even though they could cancel at any time), you know there’s value in what you have created.
4. Financials – What You Need, When You Need It, and Where It Will Come From
Depending on what you’re looking to do, you’d be surprised by how much money you need to get your business off the ground. By doing research early on and having a plan, you can save yourself from future headaches by identifying all your costs upfront.
Plan out what kind of funding sources you’ll need; could you bootstrap it? Maybe, but maybe not. Do some research!
William Schantz’sBonus Tip
Even if you’re building your product in a market that doesn’t have many competitors, it’s still wise to keep an eye on what they’re doing. Learning how they approach marketing will give you insights into their business and customers; understanding your competition can help you refine your strategy. Still, if you are looking for more professional help, feel free to contact William Schantz for better business solutions!