“Hey, I have this great idea that will take the mattress industry by storm and make millions. If only I have the capital to start the business.”
You’ve probably heard someone make such claim before. It just seems the only thing holding them from moving from idea to business is some huge capital. But this line of thought is deceptively miles away from reality.
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Here is another common extreme. I was recently on the phone with a friend who runs a consulting company for startups. He talked about a client he has been working with for over one year trying to develop a business idea and a business plan. They had been able to develop something workable but still trying to figure out how the business will make a profit. His approach sounded professional and executive; especially if you are looking from the business school approach of starting a business. If you have a lot of money or investors’ money to start a business, it’s okay to go through all of that. But if you are just a regular person trying to get your feet into the world of business, the last thing you want to do is to spend all that time, money and effort creating a perfect product, and then find out nobody wants to use your product. You also don’t want to assume that capital will solve all your business needs.
Now that we’ve got that out of the way, there has to be a balance somewhere. How do you go from idea to actually start your first business? I’m going to share with important questions you should answer and the steps to take your idea from your brain to the market.
Answer these 9 important questions one after the other to decide if your idea is worth more than a thought and if it will make a profitable business. The further you go with answering these questions the more clarity you’ll have about your business idea.
Table of Contents
1. Why do I want to start a business?
Most people think starting a business will solve their entire money problem. They believe they’ll have more time, more freedom and live the dream. If that is your sole purpose of starting a business, you may want to slow down a little and dig deeper to find a more compelling reason. You’ll be disappointed to know that starting a business does not bring more time, freedom or money; at least not in the early or mid-stage. What you get is the freedom to choose your working hours but that will often mean working longer hours than usual.
For me, for a very long time, I’ve heard people tell me I couldn’t do certain things. I wanted to compete with myself and prove that I can create things that will make the lives of people better and make a fortune while at it. Also, coming from a Christian background, I’ve watched adults talk about God without really believing in the potency of this God through their action. I wanted to create a life driven by faith. These were my ‘whys’. You have to find yours and be sure it makes the journey worth it.
2. Is my Idea a cure or prevention?
Every business is in the business of solving a human problem. But some problems are more compelling than the other. People are more willing to respond to the solution to a problem they already have than try to prevent a problem that is not yet there. Most people are not so concerned about global warming because they don’t see how the problem directly affect their life.
If you intend to increase your chance of success, the preventive market may not be a very compelling one, except the market are compelled by law like insurance and vaccination. You want to sell a cure to a problem and not prevention. Is there a hungry crowd for the solution your idea will solve? Are people emotionally attached to this problem? You can answer this question by simply going on social media, searching on Google or visiting an online forum to read what people are saying about it. Or you just have a conversation with people.
3. What are the market and competition?
When you have established that your idea is indeed a cure, next is to research deeper into the market. You want to know what is happening in your industry and who are running the show. If there is little to no competition, that may be a bad sign because a few competition could mean the business idea is not profitable or that the market is too small. On the other hand, too many competitions may mean you’ll have to work harder or that you need to niche down your idea. For example, you’ll find that starting an e-commerce business that sells every item is a highly competitive market. You have big players to compete with. You’ll be better off narrowing down to an e-commerce business that sells specific items like furniture or kid toys.
You also want to know that people are already looking for your solution and what the size of the market looks like. Use keyword research tools to learn the average number of people searching for your solution on the search engine, the level of competition from advertisers and other related search people are making. This will give you intelligent insight into your market and competition.
4. Who is my solution for?
This is where you choose your market. Two people in the fashion business may decide to serve different markets; one making wears for corporate workers, the other making uniform for schools and security outfits. You need to understand the people you want to serve. You don’t want to sell vacation services to fresh graduates or market Cardy B’s kind of fashion to devoted Muslims. It’s a costly mistake to invest long hours, money and effort into starting a business to find out that the people you reach do not want your product. You need to know who you want to sell to, what are their aspirations, what are their habits, needs and belief, where can you find them? You should spend more time thinking of the market you want to sell to instead of focusing all your time on creating the perfect product or service. The market always comes first.
5. What skill sets do I need?
The idea is worthless without execution. No one is highly paid for being the one with the idea. Execution is what brings result and that’s where you get paid. And the gap between an idea and result is skill sets. There are many people in the world with good ideas but there are not that many people who know how to take an idea to people that want it. With the information you have gathered at this point, figure out what skills you need to get this idea off the ground. You’ll usually need a combination of skills but few core skills are the bedrock of most businesses. If you have an app idea in the health care section, you’ll need programming and health industry skills. If you want to sell products online, you’ll need marketing and product sourcing skills. If you want to start an online education service, knowledge in the field of study and technical skills will be primary. Figure out the primary skills your idea will require.
6. Where will the skills come from?
Which of the skills should you hire? Which skills you can provide? For skills you can provide, do you already have those skills or will you need to develop them? For the skills you don’t have, you have to figure out how to get other people to provide these skills. You can hire, partner or outsource them. Thankfully, it’s easy to find freelance services for most business skills you will need, except, of course, the leadership skill to run the business. You don’t have to hire full-time employees. You can simply engage freelance workers for specific tasks like designing your website, building an app, creating brand materials, digital marketing services and so on. Also, note that moving from idea to an actual business will bring many obstacles and challenges. So you have to have problem-solving skills to navigate every step of the way.
7. But, I don’t have money
You see, you need money to grow a business. You need money to hire people, to rent an office, to pay for tools, for marketing. You need money to do all of that and more. If you don’t have money to do all that, there are two ways to deal with the money issue;
- Use other people’s money: Borrow from friends and family. Or partner with someone who can provide the money.
- Use your skill to make money: if you have programming, writing or any professional skill you can offer as a service, sell your skill to make money. And invest the money you earn into building a business around your skill.
8. Is it financially viable?
After a young man had listened for hours to the wise monk, he said, “thank you so much. I have learned a lot from you today”. The monk responded, “You have learned nothing. All you have is information. Now go and start learning”. It doesn’t matter how many theories you have about a business. None of it matters until a stranger says yes to your creation. All the theories in your head, you have to prove it in the real world.
In the course of you research and study, you may have information about the potential profitability of an idea. But you can only know when you get your creation out there. The best way to do this without spending a lot of money is to create an MVP – a minimal viable product. This is the basic form of your idea that goes to the market to get feedback from actual people. For example, instead of invest a lot of money to set up a digital advertising agency, create a simple website starting from your home, and spend a little budget advertising on social media. Instead of starting with a full-scale fashion outfit, start with making and displaying your creation with colleagues and on social media. Watch how people react and interact with your product. Use the feedback you get to gauge the market reception for your idea, measure results and improve on it.
9. Find your Pivot
The information gathered from your early adopters will help you figure out what works and what garnered the most response from your audience. You might find that their feedback is entirely different from what you expected and planned for. This can lead you to “pivot” your business model, or change a fundamental part of it. Changing direction doesn’t mean you failed entirely; it actually helps to prevent bigger failures you may have encountered. Continue to go back to answer each of these questions until you have a market-proven business. Only then should you go all out to scale your success.
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