Physicians Creating a Business Plan: Track Your Assumptions
Category: Physicians in Business
If you are a healthcare entrepreneur contemplating a new product or service launch, your most challenging task will be in explaining what your product is, and why anyone would be interested—–explaining in reasonable span of time. Often called the “elevator test” or the “elevator pitch“, the goal is to explain your product in the time it takes to ride up in an elevator. Venture capitalists use this as a test of investment potential. Being succinct with your pitch demonstrates clarity, focus, and purposefulness. Jeffrey Moore’s classic book on Marketing Strategy, Crossing the Chasm, offers a proven formula for getting it down: “The key is to define your position based on the target segment you intend to dominate and the value proposition you intend to dominate it with. Within this context, you then set forth your competition and the unique differentiation that belongs to you and that you expect to drive the buying decision your way.” Here is Moore’s template (just fill in the blanks in the parentheses) and then an example for how to use it:
- For (target customers – your main market segment only)
- who are dissatisfied with (the current market alternative),
- our product/service is a (new product category)
- that provides (key problem-solving capability).
- Unlike (the product alternative),
- we have assembled (key whole product features for your specific application/solution).
Here’s an example of how it might work for hypothetical physicians contemplating starting a premium office practice:
- For patients and families who prefer and can afford a premium medical service
- who are dissatisfied with the impersonal service and hassles of managed care,
- our medical practice is a new personalized, limited enrollment member-fee-based expanded caring and wellness health service
- that provides our members with complete clinical services, with on-time, personal attention in our clinic or in their home.
- Unlike current medical practices operating under traditional indemnity or managed care arrangements,
- we have assembled a complete service that not only covers our patients’ illness under their traditional coverage, but also provides a comprehensive wellness program with dieticians, trainers and holistic medicine practitioners.
Even if you aren’t contemplating a new venture right now, Moore’s book is an intriguing look at how companies enter or develop a new market.
If you have a business idea rolling in your head, download the “Thumbnail Business Plan” from my Success Circle members area, and walk your idea through this simple, but effective new venture planning tool. If you’re puzzled about how to make your vision a reality, contact me to arrange a business strategy consultation to explore how you can accelerate your launch and be more strategic in your business planning.
Business Planning: Track Your Assumptions
One of the most difficult aspects of business planning for a new venture, product or project, is documenting and tracking the assumptions you make going in. Your projections for how customers will find your product, how they will use the product, how much they will pay, how many customers there are—– are all based on your assumptions, even if you have “research” to back them up. Write down your assumptions AND a brief notation about how you will steer your project or venture differently if the assumption doesn’t pan out as expected. An excellent and classic article to read on the subject is “Discovery-Driven Planning,” by McGrath and MacMillan, available from the Harvard Business School Publishing (HBR, July-August 1995, #95406). Go to the HBR site and download the article; the cost is about $5.00. http://www.hbsp.harvard.edu/products/hbr/index.html