So you’ve got a great business idea… now what?
It just suddenly came to you one day. Maybe it was on the day you graduated, picking up that diploma. Maybe it was in the shower as your mind wandered from one unconnected thought to another.
However your business idea came to you, it’s an exhilarating feeling to start thinking about creating something of your own. That excitement is a powerful thing. It’s an energy you’ll want to channel into making your idea a reality.
But, before you get carried away, and before you spend any money (something that can be quite limited to post graduates) you need to take a step back, and ask yourself some questions about your business idea. Only once you’ve answered these questions you’ll be in in a position to take your business forward – or not.
Is my business idea viable?
We’re all guilty of having tunnel vision at times; times when we’re too wrapped up in something to see it objectively. This is a regular occurrence on Dragon’s Den. We see an entrepreneur pitch what they think is a failsafe multi-million-pound business investment. The Dragons then point out that the business solves a problem that doesn’t actually exist. Then the painful moment when it turns out the entrepreneur has spent their life savings on a business that isn’t viable. Whoops.
A viable business should encompass a product or service that enough people are willing to part money for at the prices you charge. This should generate enough profit to keep the business afloat, providing a wage for you and your employees. It’s that simple. You can get a firm idea on whether your idea will do this by doing some basic market research: speaking to prospective customers and getting honest feedback about your proposed products or service. That research should include looking at the competition and seeing how well they’re doing.
What makes me different or special?
If you walk down any high street in any town or city, you’re going to see lots of the same types of business. The competition is equally crowded online. Whilst many of those businesses will do OK, a sizable number will struggle purely because the competition is so fierce. That choice may be great for consumers, but it’s not so good for you. If you don’t give people a compelling reason to go to your business instead of the competition, then you’re going to struggle too.
The best way to draw in and retain customers is to do something different or special that your competition simply can’t offer. That might be identifying a particular niche within your market or focusing on a particular specialism. Why be a Tesco Express when you can be an independent Italian delicatessen specialising in authentic freshly made panini sandwiches? Alternatively, what makes you different might not be your product or service but your proposition. Perhaps you’re unbeatable on price or can offer a superior service, whatever it is – you then have to follow through by delivering on your USP once the business is up and running.
What is it going to cost me?
There’s a fine line between making sure you have sufficient funds to start a business and not having enough. It’s very easy to get carried away and overspend on things you don’t actually need. Equally, underspending will put you at a disadvantage if you don’t have the necessary resource to succeed. But, if you have to veer towards one, try and limit what you spend.
Whilst you’re still at the idea stage, think about the bare minimum investments you will need to get your business started. Do you need premises or can you make do running the business from home? What equipment do you need? Do you need to take on staff or can you handle the workload yourself? Finally, is there a way you can road test the business without significant investment to get a real-life understanding of what’s involved?
It’s important to think about all these questions before you commit any money to your business. You might find once you add all this together, your idea needs refining or simply isn’t going to work. On the other hand, if you’re happy to proceed, by answering these questions you’ve essentially laid the foundations for writing a more detailed business plan; an essential document for any start-up business.
With all this in place, you’ll put yourself in a great position for business success.