There’s no one right way to plan a business. Some entrepreneurs build a business plan, wheras others simply jump on the right opportunity at the right time.
That said, the stories behind the forming of today’s most successful and famous companies and brands show that certain practices and traits may help improve the odds of business-planning success.
Here’s a look at four business-planning lessons from some of today’s biggest business success stories:
Uber: Solve a common problem
The ride-hailing company now valued at more than $50 billion was, the Vanity Fair story goes, first envisioned when tech entrepreneurs Travis Kalanick and Garrett Camp were attending a tech conference in Paris on a snowy night in 2008. They were trying to find a taxi, but none were available. The two friends quickly thought up a technological solution to this problem: Create a mobile app that allowed people to easily hail a comfortable ride.
They noted that the same cab shortage was common in San Francisco and figured an on-demand car-hailing service would help ensure cars were available when and where people actually needed them.
Soon after, they brought up their idea at a “JamPad” in Paris where they and other entrepreneurs were throwing out possible ideas for start-ups, according to a profile in Vanity Fair.
The other entrepreneurs apparently didn’t think the ride-hailing idea stood out from the other ideas that night, but Kalanick and Camp didn’t give up once they got back to the States. They spent a couple of years tinkering with their concept and launched the first UberCab service in San Francisco in summer 2010 “with only a few cars, a handful of employees, and a small seed round,” Vanity Fair reported.
Amazon: Conduct intense market research
According to Sucess.com, Jeff Bezos, age 30 at the time, was working as a Wall Street executive in the mid-1990s when he decided to quit his job and pursue a dream: Starting an Internet retail business. In the few months before leaving his job, the Amazon.com founder conducted market research on the then-nascent online commerce market. He brainstormed a list of 20 items he thought would sell well online including CDs, videos, books, computer software and computer hardware, according to a profile in Success magazine. He then thoroughly researched each of his ideas and settled on books, because he figured many bookstores were only able to stock a few thousand titles while there were millions of titles available.
“I used a whole bunch of criteria to evaluate the potential of each product, but among the main criteria was the size of the relative markets,” Bezos told Success. “Books, I found out, were an $82 billion market worldwide. The price point was another major criterion: I wanted a low-priced product. I reasoned that since this was the first purchase many people would make online, it had to be non-threatening in size.”
While his wife drove their Chevy Blazer, Bezos reportedly typed up a business plan and started calling prospective investors on the cross-country road trip that relocated his family from New York to Seattle.
Amazon officially launched in 1995 selling books only, but within a couple years branched out into other types of products, including CDs and electronics.
Apple: Identify your risks and challenges
Many entrepreneurs approach business planning with unfettered optimism. Apple Inc. founders Steve Jobs and Steve Wozniak knew better.
Before Apple launched its famous Macintosh personal computer in 1982, the company put together a 30-page business plan, called the Preliminary Macintosh Business Plan. The plan, now on display at the Computer History Museum, shows that Jobs and Apple cofounder Steve Wozniak were well aware of the risks and challenges that lay ahead—and they spelled those out in their business plan in a section called “Open Issues.” The risks that Apple laid out in its Macintosh plan included:
- “Europe has not been given much consideration yet.”
- “We are designing our packaging to accept a door-less disk drive only. We feel Vennard will come through. Should we be taking this risk?”
- “Is our schedule realistic?”
You can download the original Apple Macintosh business plan on the Computer History Museum’s website.
Burt’s Bees: Be willing to experiment—and move on
Burt’s Bees natural skin-care products were famously spawned from a beekeeping and roadside honey business in Maine run by namesake Burt Shavitz, who recently passed away. According to Inc. the company didn’t become a huge success story, however, until Shavitz’s former love interest, Roxanne Quimby, took over the business in the mid-1980s and began to use the beehive wax to make a variety of home and health care products, including candles, furniture polish and lip balm.
Quimby grew the business originally by taking the products to craft fairs. She used those fairs as a product testing ground and informal “focus groups” to see how customers interacted with the products and how well they sold, she told Inc magazine in 2004:
I’m not sentimental about products—they perform or they don’t. We tried lots of different things. One was beeswax lip balm. It was clear, very early, that people bought lip balm 10 times faster than they bought beeswax furniture polish. Next was a moisturizing cream. It sold better than the polish too.
By 1993, Burt’s Bees had $3 million in sales and Quimby decided she needed to move the company out of Maine and to a more business-friendly place—North Carolina. She soon bought Shavitz out of the business. In 2007, Burt’s Bees was sold to Clorox for $900 million, according to The Washington Post.
These stories show that every wildly successful entrepreneur paves their own road. Yet, they offer a fascinating glimpse into traits and practices that other entrepreneurs can learn from when building what will hopefully be their own wildly successful ventures.
By Kelly Spors