Personal MBA: Critical Assumptions

Personal MBA: Critical Assumptions

We naturally make assumptions about everything every day during the course of our lives. Those assumptions, often times, are of little consequence, but when they are the basis of major business decisions, they reach the status of critical. Kaufman defines critical assumptions as, “facts or characteristics that must be true in the real world for your business or offering to be successful.” I’ve found that an incredibly helpful tool to identify and test these assumptions is a business plan. I didn’t do this initially with The Tin Society, and it wasn’t until I started helping my wife start a business for herself that I realized the time, risk and cost saving potential of a business plan.

One helpful strategy Kaufman outlines, that I more or less stumbled upon, is shadow testing, or “the process of selling an offering before it actually exists.” Before I started selling any tobacco subscriptions, I created a simple google survey and posted it in every pipe smoking group that I could. I got a lot of good feedback, and some confirmation that a pipe tobacco subscription might be a viable business. As I continued to prepare for a pre-launch of The Tin Society, I created a rough prototype, and a landing page that I could direct people to. The landing page was meant to capture emails from people who might be interested in signing up for my subscription. This was another layer of confirmation that my assumptions, for the most part, were correct. Here are a list of some of the assumptions I made as I planned my business and whether or not they were correct.

  1. People would be interested in purchasing a pipe tobacco subscription – Correct
  2. I would be able to purchase cheap social media advertising to get my business in front of 1000s of pipe smokers – Incorrect
  3. My subscribers would want to receive actual tins in their box – Incorrect
  4. The convenience of the subscription would be more important than the price – Incorrect

As you can see, most of my assumptions were incorrect, but my most critical one, that people would actually want to purchase a subscription, hit the mark. With this confirmation, I’ve been able to grow my business, all along collecting feedback from customers and making changes to my product offering to grow my subscriber list. Bottom line, these critical assumptions mean the difference between success and failure. Every entrepreneur needs to identify and test the truth of these assumptions.