As already mentioned before, starting a business is a process. A process may be defined as series of actions that are taken to achieve a defined outcome. In other words, from the time the idea is conceived to when it is launched, there are stages of development to go through. This process is iterative and may not necessarily follow a specific sequence, though certain things have to done first before others.
However, breaking it down into stages is convenient and enhances understanding. Fortunately, these stages have been studied by both academics and practitioners, which have resulted in developing proven steps that if taken in the right order, can help cover enough grounds that will provide a solid foundation for success.
There are many frameworks which can be used in a start-up situation but the three listed below are our favourites.
The Business Start-up Architecture
The Business Start-up Architecture simply divides the process of starting a business into there main categories, namely; conception, Design and Development, and Execution. It provides a summary of what to do at each stage. It is a very good portrait to start with.
Byers, Dorf, and Nelson Framework
Source: Stanford University – Technology Ventures: From Idea to Enterprise
Thomas Byers, Richard C. Dorf, Andrew Nelson
The Byers, Dorf, and Nelson framework is from their book, Technology Ventures: From Idea to Enterprise, used by Stanford University in their Technology Ventures programme. Though it is particularly concerned with technology ventures, it can be used for any business venture. It is very useful in that it allows consideration to be given to a start-up early in terms of vision, strategy, innovation and resources or capabilities etc.
The Startup Framework
| Vision, Values and MissionWhat is the story behind your business that you want people to tell about your business. What are your core values. | ||
| Resources | The opportunity and Timing in Business Environment | The problem |
| Where you are now and have you got the capabilities required to launch the business | The opportunity you have spotted in the sector or industry you are interested in. Is the timing right? | What problems exist in your area of interest that you are you solving? |
| Solutions | Customer Segment | Unique Value Proposition |
| What solutions have you got to solve the problems. Are they authentic? | Who are your ideal customers is the market large enough to sustain your business | What value are you offering the that will make customers prefer your offerings |
| StrategyChannelsWhat is it that you have and what activities or actions will you take to give you an advantage and how can you sustain it without being imitated or bought?What channels are you going to use to reach and connect with your customers?Cost StructureRevenue StructureDo you know what your cots are? What are your costs? Are they mainly fixed or variable?What are the sources of revenue and in what form are they going to to be received e.g. through sales or subscriptions? | ||
| Measurement | ||
| How are you going to measure whether things are working per your original idea or whether to changes course? | ||
The Startup Framework what we prefer to use. It is a variation of the Business Model Canvas and the Entrepreneurial Ecosystem used by Taylors University, Malaysia in the Entrepreneurship course. It is very comprehensive and can be used on its own to properly evaluate the whole entrepreneurial process.
It is only after completing these processes that a business plan should be written. Starting a business with the business plan first without proper evaluation, especially the demand, market and customers’ expectations is not a good idea. A business is like a building and if the foundation is solid, everything will be held firmly together.