Your LivePlan Small Business Plan – Problem and Solution


Truly understanding the problem your small business will solve and effectively documenting it in your LivePlan small business plan is a big hurdle to get over.  However, if you can develop a solid grasp of this, the likelihood of your business succeeding is significantly higher compared to a business that lacks this understanding.

Your LivePlan Small Business Plan Problem and Solution

In fact, if you don’t have an idea for a business, pinpointing a problem that individuals or businesses experience on a regular basis is an extremely effective way to come up with one.

Every business should be able to identify the core problem it solves and answer the 5 W’s related to it: who, what, when, where, and why.

Getting a handle of the problem makes developing the solution so much easier.

In this part of the Complete Guide to Creating a LivePlan, I dive into understanding and validating your customers’ problem and your business’s solution and offer up a detailed example of how you can do this with your business idea.

A quote from a pretty smart guy!

Problem Worth Solving

Cash is a limited resource, so people and other businesses are more likely to spend theirs on a solution to a problem they are experiencing.

How can you develop an in-depth understanding of the problem you want your business to solve?

The best way isn’t earth shattering and shouldn’t cost you anything.

You just have to learn how to do it effectively.

Simply talk to people.


  • Reaching out to other businesses if you plan to be in the B to B space to identify pains they are experiencing and collaborate on a solution.
  • Doing the same with friends, family, and other individuals you know if you intend to offer a consumer product or service.
  • Solving a problem you are experiencing in your own personal or professional life.

Call on Other Businesses

This is a great exercise for anyone who wants to start a business but doesn’t have an idea.

It is also recommended if you are starting a business, think you have an understanding of the problem you will solve, but want further confirmation.

You can identify and validate a problem worth solving and begin developing a solution in one effective exercise.

If you want to solve another business’s problem you can contact companies in an industry that interests you and find out where their biggest unaddressed pains lie.

It is best to speak to people in a position of power within an organization, as your ideal end result will be to get some kind of commitment to purchase the solution you come up with to the collectively identified problem.

The conversations should go deep, lasting longer than 5-10 minutes, so make sure anybody who is willing to speak with you knows that you really want to develop a solid understanding of their business and problem areas and consider letting the subject schedule a convenient time to chat with you.

You should always aim to ask open ended questions, which aren’t answered with a simple yes or no, and follow up responses by asking the subject to “tell you more” when appropriate.

Do this several times and with several different businesses in the same industry.

If you can avoid intentionally steering the conversations to the same problem, but several businesses point out similar pain points, you know you have hit on something.

Once a common problem is identified, collaborate with the business owners and work together to begin developing a solution.

The best case scenario is to get the business or businesses you collaborate with to commit to purchase whatever product or service you come up with.

With some level of commitment you can move forward with your business plan with more confidence.

Check out this example of how you can cold call a business to uncover problems worth solving.


Of course, this exercise will result in a lot of rejection.

You may have to call dozens of businesses before finding someone who will even speak to you.

But dealing with rejection is a big part of business and sales and if you find a few good, willing participants this process can save you a lot of pain and struggling in the future.

Talk to People in Your Life

I do not recommend relying heavily on your friends and family for validating your business idea.

After all, what mother is going to tell their sweet child that their business idea sucks?

Okay, maybe there are a few parents out there that won’t encourage entrepreneurship, but the point is that you are much less likely to get unbiased feedback on your idea from friends and family.

However, talking to friends, family, and other individuals in your life about problems in their lives is a whole different story.

Similar rules apply to talking to your friends and family as the ones that applied to talking with other businesses.

When exploring a problem, use open-ended questions and dig deep.

You may need to steer a conversation a little more than you would with a business, as the number of problems your friends and family are experiencing is probably larger and more wide-ranging.

Instead of asking your random friends and family to tell you about the three biggest problems they experience regularly you should focus your efforts a bit more.

For instance, lets assume you are at an age where lots of your friends and coworkers are having babies.

You suspect there is a business opportunity because you constantly hear them complaining about how tough being a new parent is.

You can focus your exploratory discussions on the new parents you know.

Tell them that you want to start a business and would love to work together on identifying a problem they are having as new parents.

Ask them about the biggest unsolved problems they regularly face related to being parents to a newborn.

If you talk to several new parents and similar unsolved problems keep popping up, you may have the beginnings of a problem worth solving.

Again, you can take these conversations a step further and collaborate with the parents to develop a product or service to solve their problem and ask them to commit to purchasing it once it is fully developed.

Solve Your Own Problem

Some of the best businesses are born from problems the founder experienced.

Let’s take the example above where we assume you have friends and family who are new parents and instead assume you are the new parent.

If you are the one experiencing the sleepless nights, constant crying, and endless diaper changing, you are much more likely to be passionate about solving a problem for new parents.

Zero in on the problem you are experiencing and then talk to some of the other parents you know to determine if they are experiencing the same issues.

Sign up for The Embarkment’s Online LivePlan Workshop and receive dozens of fillable PDF forms to help you organize your thoughts and guide you through the LivePlan process.

Whether you are solving a problem you are experiencing or discovered one from talking to others, you should have clear, concise answers to the 5 Ws.

The 5 Ws

Who does the problem affect? Identify specific groups, organizations, customers, etc.

What is the problem?  This is what you should ultimately identify by talking with your friends, family, customers or potential customers.

When does the problem occur and when does it need to be fixed?

Where is the problem occurring? Only in certain locations, processes, products, etc?

Why is it important that you fix the problem? What will happen if you don’t fix it?

If you spend enough time thinking about the problem you want to solve and developing answers to the 5 Ws, developing a solution that people will actually want to buy will be so much easier.

John Dewey was a philosopher and psychologist and a major proponent of education reform.

If you spend enough time thinking about the problem you want to solve and developing answers to the 5 Ws, developing a solution that people will actually want to buy will be so much easier.

Your Solution

If you are starting a typical service based business and you are good at what you do, offering world class customer service that is significantly better than your competition may be the cornerstone to your path to success.

In this case, you can’t just say you’ll be great at customer service.

You have to actually identify ways that you will excel at customer service and execute them.

If your solution is a more unique product or service, I would recommend gaining an understanding of and adopting the lean startup philosophy.

The philosophy is based on the book The Lean Startup by Eric Ries and is extremely popular right now among startups.

Eric Ries’s The Lean Startup offers a relatively new approach to starting a business.

Under the lean startup principles, a company should not be asking, “can a product be built or service be offered”, but rather “should it be built or offered and can a sustainable business be built around it”?

You answer this question by initially developing an MVP, or minimum viable product or service, which is a bare bones version of the product or service you ultimately want to offer.

Offer this MVP to customers as a test, get and process feedback accordingly and take appropriate action based on the feedback.

You don’t spend months or years developing the perfect product.

You try to get something to some of your customers as soon as possible so that you can get feedback and determine if you should stay the course with your product or service idea, need to make adjustments, or if you should pivot.

This animated explainer video sums up The Lean Startup in a short, easy to digest way.

You can read more about the lean startup philosophy here.

A Detailed Example

In today’s small business environment there is a world of resources available at our fingertips that make validating business ideas, and so many other things, significantly easier than they were just a few years ago.

Big companies like Google and Facebook offer different free or low cost tools for testing demand for a business idea.

There are also free survey tools like Survey Monkey that can help.

But whenever possible, you should try to presell your product or service to truly gauge demand.

Crowdfunding platforms like Kickstarter may be an option for you, but they are not right for everyone.

As an alternative, most new businesses can employ the strategy described in this article on’s blog.

Justin Mares started Kettle and Fire after validating his idea online for less than $100.

Justin Mares, founder of Kettle and Fire, documents how he left his secure, six-figure job to pursue a business idea he had validated for less than $100.

In 2014, Justin was on a highly paleo diet and was intrigued by a new, trendy superfood he was hearing a lot about; bone broth.

The problem was, he didn’t have the time or kitchen equipment required to make it himself.

He searched online for a solution, but he couldn’t find any companies that were selling packaged, organic, grass-fed bone broth.

So he set out to validate whether there was a legitimate business opportunity by answering two critical questions:

  • How many people want this product and
  • Will they spend enough on the product to warrant starting a business?

He searched blogs and Google Trends and determined that there was an increasing interest in the bone broth trend.

The 4-Hour Work Week is a bestselling book on how to leverage our most limited and valuable resource; time.

He then created a basic online landing page, spent a little bit on Bing Ads, and began selling a product that didn’t even exist to see if people would actually pay for it.

After receiving a significant number of orders, Justin reached out to customers to inform them that, unfortunately, the product was out of stock.

He offered a full refund or a 50% discount for anyone who was willing to wait a few weeks for the product.

And most people took the discount.

It wasn’t until this point that he really started working on the rest of the important details, such as how he would make and package the product and how he would get more customers.

He wanted to validate the idea first.

Today, Kettle and Fire is a top selling product on Amazon and, according to SimilarWeb, has over 50,000 visitors to its website monthly.

This is an excellent example of how you can go about creating a business based on a problem you are experiencing.

Justin had a problem that he suspected others may be experiencing as well.

He validated his hunch and pre sold his solution.

Just about any business can employ some variation of this tactic.

Even if you are selling a service or won’t be offering your product online, you can probably use some variation of this process to validate your business idea.

Don’t be afraid to get creative and if you don’t get the results you expect, address it now.

Again, the validation process can save you an immeasurable amount of undue stress and money in advance if you actually do it and do it right.

Next Steps

Defining your problem worth solving and solution to the problem is a critical first step in the LivePlanning process.

It’s not a step you should take lightly.

Sign up for the next LivePlan Online Workshop and get help and feedback on this section of your plan.

Then, move on to the next part of the guide, where we look at defining and understanding your target market.

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