Aaron Hoos

Successful businesses started with an idea. Somewhere between the idea and today’s success, an entrepreneur worked through the idea to create a business model, a brand, a sales funnel, a business plan… and then they implemented those things.

There are many people who want want to start a business but can’t seem to get their idea off of the runway. They have a vague, loosely-defined business idea but aren’t sure what to do next. (“I’d like to consult about marketing” or “I’d like to work on cars” or “I’d like to become a real estate investor”, etc.). These are good ideas, but they aren’t enough to move forward with.

Here’s a tool I developed a few years ago to help people solidify their idea into a strong foundation on which they can create a business. It’s called the Business Palette. The Business Palette is for people who have a business idea and now need to turn it into a business model, or who want to start a business but need help nailing down what they want to do.

I’ve used the Business Palette to help several clients who wanted to start a business but weren’t sure where to start.

THE BUSINESS PALETTE: AN INTRODUCTION
In painting, a palette is a tray that contains some basic colors, and you mix those colors to create unique colors to use on the canvas. The Business Palette works the same way: You start with some basic ideas and you mix and match to bring clarity and focus to a single business idea that you can move forward with. From there, starting a business is much easier.

I’ll show you how, and I’ll use a example of a business idea that I would start (if I wasn’t already swamped with work in my current business!)

STEP ONE: SET UP YOUR BUSINESS PALETTE
The first thing to do is to set up your Business Palette. Use a large posterboard or whiteboard. Write the following 4 sentences, one along each side of your Business Palette:

• What problems does my target market have?
• What do I know about solving those problems?
• What do I like to think about?
• What do I like to do?

You can see that I’ve done that, below, in red, and left lots of blank space in the middle of my palette.

STEP TWO: FILL OUT YOUR PALETTE WITH BASIC IDEAS
Now it’s time to fill out your palette with some basic ideas. Beside each of the sentences you wrote in the previous step, list as many relevant ideas as you can.

You’ll likely include your business idea in one of these four areas (in my experience, a vague, unrefined business idea consists of one or two of these elements). Be sure to fill out each of the 4 areas and exhaust your thinking in those areas. Do some research, if necessary, to answer the “What problems does my target market have?” question.

Notice that it’s very similar to a guided brainstorm. As you write down some of your ideas, subordinate ideas will come. Write them all down! And I should also point out: You don’t have to do one at a time. Just fill them in as they come to you. And you may find that you repeat an idea on a couple of different sides of the Business Palette.

You’ll see that I’ve filled out some ideas below (but I didn’t fill it to the level of detail I normally would… I didn’t want it to become overwhelmingly messy while I’m trying to introduce it!)

In my example (the business I would start if I wasn’t already doing what I’m doing), here are some of the things I’ve listed:

• Across the top, where I’ve written “What problems does my target market have?”, I list the problems that the average stock investor faces: “Knowing exactly when to buy and sell”, “Finding good stocks at affordable prices that turn into big winners”, “A desire for bragging rights”, and more.
• Across the bottom, where I’ve written “What do I know about solving those problems?”, I list some things that I can do (based on my previous experience as a stockbroker): “Fundamental analysis”, “How to spot trends”, “Buy and sell signals”, “Killer sectors to invest in”, and more.
• Across the left, where I’ve written “What do I like to think about?”, I list topics that I would love to get paid to ponder: “Ecomomics”, “Stock sectors”, “Fundamental Analysis”, and more.
• Across the right, where I’ve written “What do I like to do?”, I list the activities that I would love to get paid to perform: “Advise”, “Blog”, “Analyze”, and more.

STEP THREE: MIX THE IDEAS TO BRING CLARITY TO YOUR BUSINESS MODEL!
Now that you’ve put down the basic “colors”, you can now start mixing and matching.

Pick a few of the basic ideas and combine them together to see how they fit. Make sure you pull in elements from each side of the Business Palette to create a business that solves problems doing what you love to do. (That sounds like the perfect business!)

You’ll notice right away that many of the basic ideas tend to be related, and they can all theoretically mix together. In my example, there’s no reason why they won’t all somehow play a part in my business. But hopefully you listed more ideas in your real Business Palette (compared to my example) and you can discard some ideas. Other ideas that tend to be related should be considered but don’t have to be included. It’s likely that many of the related ideas will play a role in the future, but right now you’re looking to bring your business idea into focus, so don’t connect all of your ideas together. Connect some of them together and you’ll end up with something far more compelling.

Experiment with different combinations in the same way a painter would.

After a while, you’ll end up with a few good ideas and a bunch of mediocre ideas and a few bad ideas. That’s exactly what you want.

In my own example, I didn’t list all of the ideas, I just picked one (because I was running out of room — sorry about that).

From my example, you can see that I’ve combined a few of the ideas into one. If you can decipher my arrows, you’d read: “A blog about finding killer sectors to invest in for bragging rights through quality fundamental [stock] analysis.”

That’s a good starting point. It might require more tweaking. Or if I continued to connect ideas, I might find something better and more focused. But this is a good starting point because it brings together problems and solutions and my own expertise and interests. The idea I’ve listed above is definitely a business I would enjoy starting!

WAYS TO USE THE BUSINESS PALETTE
As mentioned, you can use the Business Palette to bring focus to vague ideas. That’s how I’ve most frequently used it in the past. But I’ve used it in other ways, too:

• To strengthen a brand that was floundering
• To reorient an existing brand that had started to stray from its original course
• To help monetize a blog that was growing in popularity but not making any money
• To help an aspiring (but directionless) entrepreneur come up with an idea for a business
• To develop products and services for a stronger brand that was looking to extend its offerings

NEXT STEPS
Once you’ve completed the Brand Palette, you essentially have a nicely defined business model! You know what problems you’re solving and how they’re getting solved. In most cases, you’ll know what you’ll actually be selling.

So now that you know this, I’d advise that you do the following:

1. Develop your brand. Create a strong brand that resonates with the elements you’ve included in your Business Palette. Check out this related blog post: When your product’s benefits just aren’t enough.
2. Create a sales funnel. Create a simple sales funnel that you can build, implement, automate, and scale. Check out these related blog posts: 3 tips to remember when building a sales funnel for your business and FAQ: I want to build a sales funnel. Where do I start?
3. Once you’ve done these three things — built a business model with the Brand Palette, developed your brand, and created a sales funnel — you have everything you need to write a business plan (in fact, most of your business plan is already created by these three pieces)… so you’re ready to start your business!

NOW IT’S YOUR TURN
If you have an unrefined business idea that needs some clarity, grab your markers, head to the nearest whiteboard or posterboard, and create a Business Palette. Bring some focus to that idea by mixing and matching Business Palette ideas to create a compelling business model!

If you tried it and it worked (or if you have questions), post a comment. I’d love to hear how it worked for you.

I’ve just created a new resource for you — the Sales Funnel Worksheet. It’s a free, downloadable resource you can download, print, and fill out to…

• Create a new sales funnel
• Optimize your existing sales funnel
• Analyze a competitor’s sales funnel
• Develop sales funnel strategy
• Participate in our Weekly Sales Funnel Challenges
• Set goals to profitably grow your business
• … and more!

Feel free to use it as often as you need to in order to grow your business!

Download the Sales Funnel Worksheet.

Here’s a tool you can use each quarter to help you breakthrough to the next level of success. It’s called the Quarterly Sales Funnel Breakthrough.

It’s a simple one-page PDF that you can download, print, and fill out. Use it to set a bold — even SHOCKING — goal about some aspect of your sales funnel. Then work towards that goal to improve your sales funnel… and ultimately to grow your business.

Download the Quarterly Sales Funnel Breakthrough

WHY YOU SHOULD USE THE QUARTERLY SALES FUNNEL BREAKTHROUGH
Running a business is time consuming. If you’re struggling to be successful, it can feel like you’re working hard just to keep your head above water. And if you’re busy earning a profitable income, it can STILL feel that way (but for different reasons).

As a result, business owners spend a lot of their time focusing on doing the same things because they don’t always have the time or direction to focus on new, business-boosting tactics.

The Quarterly Sales Funnel Breakthrough is a quick way to guide you to improve your business without overwhelming you with options and ideas.

HERE’S HOW THE QUARTERLY SALES FUNNEL BREAKTHROUGH WORKS
It’s six simple steps with the potential for profound results:
Step 1 – Choose a sales funnel stage to improve: Audience, Lead, Prospect, Customer, Evangelist.

Step 2 – Choose a metric you use to measure success for that stage. Calculate your average quarterly results. Record the number and metric.

Step 3 – Using the same metric, set an audacious goal to achieve by the end of the quarter. Record the number and metric.

Step 4 – Develop a strategy to achieve that goal. Record your ideas for each of the three months.

Step 5 – Schedule these activities and perform them.

Step 6 – At the end of the quarter, record your results and compare to your original goal.

EXAMPLE
Here’s a fictional example to illustrate:

Step 1 – Choose a sales funnel stage to improve: I choose the Audience stage. I think I’d like to grow my Audience.

Step 2 – Choose a metric you use to measure success for that stage: The metric I’m going to use is my Twitter followers. I have 2,000 followers and I typically grow by about 100 followers per month… so normally I would have about 300 more followers by the end of the quarter.

Step 3 – Using the same metric, set an audacious goal to achieve by the end of the quarter. Record the number and metric. I’m going to grow my Twitter following by 1,000 followers.

Step 4 – Develop a strategy to achieve that goal. Record your ideas for each of the three months. I’m going to do some of the following: In month 1, I’m going to be a more active tweeter, strategically interacting on Twitter with key influencers who communicate to my target market. In month 2, I’m going to create a series of tweets that will be compelling to my target market. I will also begin posting invaluable links to position myself as an authority. In month 3, I’m going to create a press release and submit it to PRWeb with the sole purpose of encouraging Twitter followers to subscribe to my tweetstream.

Step 5 – Schedule these activities and perform them.

Step 6 – At the end of the quarter, record your results and compare to your original goal. Success! I normally acquire 300 followers per quarter and I decided to try and acquire 1,000 followers per quarter. I turns out that I actually acquired 1,345 followers this quarter!

Download the Quarterly Sales Funnel Breakthrough

It’s the end of March. Time to fill out your Monthly Sales Funnel Check-up. (Keep these with your business plan and operational plan).

Wondering what the heck a Monthly Sales Funnel Check-up is? Read the first Monthly Sales Funnel Check-up blog post that kicked it all off!

The Ansoff Growth Matrix (sometimes called the “Product-Market Matrix”) is a tool that businesses can use to figure out how to position and marketing new and existing products in new and existing markets.

For example, if you have an existing product but you want to enter a new market with it, you’ll need to adopt the strategy of market development. Or, if you want to introduce a new product into an existing market, you’ll need to adopt the strategy of product development.

That’s good in theory, but what does it actually mean for your business?

Each of these strategies calls for a change in the sales funnel. Here’s how each strategy impacts your sales funnel:

Existing market/Existing product
According to the Ansoff Growth Matrix, the best strategy a business should use is a market penetration strategy.
Here’s what it means for your sales funnel:

• Since this strategy is all about increasing marketshare, you should find ways to increase the number of contacts in your Audience stage. By doing that, you’ll naturally increase the number of contacts at every stage in your sales funnel (because the ratios between each stage remain the same).
• Improve your sales funnel even further by attempting to reduce the number of people who “fall out of your sales funnel”. For example, if you have Prospects who don’t buy because there’s an objection you can’t overcome, focus in on making changes to your business, your messaging, and even your product to overcome those objections.

Success with a marketing penetration strategy is all about increasing the number of leads in your existing sales funnel.

New market/Existing product
According to the Ansoff Growth Matrix, the best strategy a business should use in this situation is a market development strategy.

Here’s what it means for your sales funnel:

• Identify the new market you want to enter and brainstorm the needs and problems of that new market.
• List the features and benefits of your existing product or service and brainstorm to discover how it can solve the problems or fulfill the needs of the market.
• You may have to set up an entirely new sales funnel to run parallel to your existing one. Although you might be able to share some of the infrastructure with your existing market, the messages you’ll use at each stage of the sales funnel will likely be fairly different.

Success with a market development strategy is all about creating a new funnel with marketing and sales messages that connect with your new market.

Existing market/New product
According to the Ansoff Growth Matrix, the best strategy a business should use is a product development strategy.
Here’s what it means for your sales funnel:

• Your sales funnel isn’t just a map for selling to people. It’s also a listening device! Use the engagement you have with contacts at each stage of your sales funnel to find out what problems you can solve.
• Whatever you do decide to do, there should be some synergies between your current products and your new products.
  As you develop a new product, make sure you always go back to the contacts in your sales funnel to see what they think. Consider using some of your existing Leads and Prospects and Customers to beta test early versions of your products or services.

Success with a product development strategy is all about listening to your existing sales funnel contacts.

New market/New product
According to the Ansoff Growth Matrix, the best strategy a business should use is a diversification strategy.

Here’s what it means for your sales funnel:

• You’ll need an entirely new sales funnel so make sure you do as much research as you can before committing to this endeavor.
• Start small with a very basic sales funnel. Treat this initial effort as a beta test and see what response is like. Are people responding? If so, you can always scale your sales funnel up.
• Seriously consider building synergies with existing markets and existing products. If you offer something completely different to a completely different crowd, you may struggle if you’re trying to break into unfamiliar territory. And, if you already have an existing product that is sold to an existing market, the amount of effort needed for a new product to a new market could cost you in time and money.
• In many ways, this approach is just like starting a new business. So treat it as such and consider setting aside members of your team to focus exclusively on this effort.
• Don’t try to treat contacts in this sales funnel the same way you would treat contacts in your existing sales funnels. It’s tempting to do that to save time but it is a quick way to sink this project.

Success with a diversification strategy is all about starting over, starting small, and scaling up sensibly.