Assumptions are an important element of business planning, but you must challenge those assumptions if you want to find success.
Assumptions are useful tools for planning, in startups and almost every other area of life. It's impossible to know everything, so we use assumptions as patchwork to complete the range of our expectations and suppositions. Sometimes, our assumptions are correct, and we are rewarded for making the effort to guess. Other times, our assumptions are wrong, and we must go back to the drawing board.
The danger lies in allowing our assumptions to become soft facts. Over time, what begins as a cautious assumption eventually becomes taken for granted, which can cause serious harm in a startup environment.
If you're a startup entrepreneur, you need to question these five assumptions constantly:
1. Your revenue forecast is achievable. When you first sketch out a revenue model, you need to make several assumptions about the life of your product and the behaviors of your customers. As you get into the swing of running your business, however, you may find those assumptions proving to be untrue.
2. Your demographics are the best fit for your product. Hopefully, you've identified your key demographics based on actual market research--like surveys or aggregated data. If not, you're running on pure assumption, and you need to take a step back and reevaluate your criteria for determining this key aspect of your business.
3. Your product is ready to launch. Most products undergo a thorough internal test before they launch--but internal tests are flawed in that your team is already familiar with the product. Be sure to test the product with people who have never seen it before.
4. Your team is on board. Your key partners, employees, and team members are integral to your business, but don't assume that they like the direction your company is headed or that they'll be around forever.
5. Your environment hasn't changed. When you first write up a business plan, you evaluate the environment, including your competition, your consumers' needs, and the overall economy (among other factors). It's easy to assume this remains unchanged, but all of these factors can change in an instant--sometimes without you ever noticing.
Only by questioning your own assumptions can you achieve true, meaningful growth. Doing so can be a painful experience, but it's far better to catch a bad assumption early than it is to let it fester and compromise what is otherwise a stable business model.
Jose Vasquez is a serial entrepreneur and tech enthusiast dedicated to helping startup technology companies get the direction and momentum they need to succeed. As the founder of Build. Brand. Blast., Jose has established a collective resource for tech entrepreneurs to consult when brainstorming, creating, launching, or expanding a new business. Jose is also the founder and CEO of Quez Media Marketing, a marketing firm that combines technology and creativity to help new and growing companies get the results they need.