You know what they say about assuming... Assumptions You know what they say about assuming... www.SmallBusinessSolver.com © 2018

Be more confident in your strategy. The Goal Be more confident in your strategy. www.SmallBusinessSolver.com © 2018

Key Points What Is An Assumption? Types of Assumptions How To Test? Certainty Example What not to do Your next steps Wrap up www.SmallBusinessSolver.com © 2018

Grab your worksheet and follow along. www.SmallBusinessSolver.com © 2018

100% True 100% False What Is An Assumption? Assumptions www.SmallBusinessSolver.com © 2018

Types of Assumptions Business Idea Sales Costs Competition It Is An Original Idea Offering Is Needed Business Idea People Will Buy It Projected Sales Are Accurate Sales Total Costs Were Captured Costs Will Remain Constant Costs There Is No Competition Competition Won’t Change Competition www.SmallBusinessSolver.com © 2018

How To Test Your Assumptions Secondary Research Primary Research www.SmallBusinessSolver.com © 2018

How Sure Are You? 100% 0% www.SmallBusinessSolver.com © 2018

How To Protect Yourself? Is there any action you could take that will help you become more confident? Can you come up with a way to keep checking the environment? Could you create a contract with a supplier to prevent your costs from increasing for the next 2 years? Could you franchise out your own idea, to entice new competitors to join you? Do you have enough cash flow in case sales are below your projections? www.SmallBusinessSolver.com © 2018

Example Cindy has developed a line of organic facial products that she wishes to launch. She hasn’t told that many people about it as she is worried that others will steal the idea. She turns to the Assumptions model to help see if there are things that she has overlooked. www.SmallBusinessSolver.com © 2018

Practice: Pie Shop Imagine you are the owner of new pie shop called The Upper Crust. Test your assumptions. What should you worry about? How can you protect yourself? www.SmallBusinessSolver.com © 2018

Practice: Pie Shop Common Assumptions How to Test? How Sure Are You? How to Protect Yourself? Business Idea It is an original idea Search for pie shops 75% The offering is needed Ask friends Studies on pie sales 60% Sales People will buy it Ask people 30% Sell pie at a festival Projected sales are accurate See how other pie shops have done Costs Total costs were captured See books of another restaurant 50% Get a mentor Costs will remain constant Investigate where inflation has increased 90% Competition There is no competition Research online 40% Visit all the cafes shops Competition won’t change Online research is that they import baking www.SmallBusinessSolver.com © 2018

Top Mistakes To Avoid Surrounding yourself with ‘yes’ men Not telling anyone about your business Thinking competition won’t change Thinking you don’t have competition Reliant on a high-sales forecast Assuming sales on verbal confirmations www.SmallBusinessSolver.com © 2018

Now What? Know your own risk tolerance Re-test assumptions that are below your risk tolerance Tweak the idea or do more research Become comfortable www.SmallBusinessSolver.com © 2018

Key Points What Is An Assumption? Types of Assumptions How To Test? Certainty Example What not to do Your next steps Wrap up www.SmallBusinessSolver.com © 2018

Be more confident in your strategy. The Goal Be more confident in your strategy. www.SmallBusinessSolver.com © 2018

Double check all assumptions with someone outside of your business. www.SmallBusinessSolver.com © 2018