4 Tips on how to succeed in turning your business idea into a viable business.
By Kynthia Melissa
May 28, 2011 - 8:13:11 AM
The journey from idea to viable
business is most often complex frustrating and sometimes rewarding.
Understanding some of the pitfalls before you set out should make the
path a little smoother
Tip 1 – Setting your idea free
Contrary to popular belief, business
ideas are not valuable. Great business ideas are everywhere, but
most every great business ideas never become a great business. The
journey from idea to business is often longer and more difficult than
founders anticipate. A fundamental assumption that most founders
have is that everyone is looking to steal your idea. The reality is
quite different. People are busy and unlikely to have the conviction
in the concept that you do. Whilst it is natural to want to try and
protect your idea, often doing the exact opposite brings the new
insight required to make it a reality. A business idea is usually
just that and requires a substantial level of input from a wide range
of sources to turn it into something of value.
The more feedback you can gain in the
early stages, the more time and effort you are likely to save in
taking that concept to market. If you can, test your assumptions
early. It is often your assumptions about the idea that are wrong.
Identify the assumptions you have made that are fundamental to the
business success of your concept. Test these assumptions.
Identifying the customer problem is at
the core of successfully translating an idea into an enterprise. An
inherent difficulty of this process is that it is difficult for an
“outsider” to clearly understand the exact customer problem.
As an example of this, I was recently
advising a new start-up venture that thought the problem they were
solving with their business idea was to fill seats for events. Their
business model meant that they took a commission on all seats sold
via their platform. Whilst on the surface, this sounds logical, when
you dig a little deeper; there are substantial issues with this
assumption. The existing players already sell the majority of seats
required. Engaging with a third party makes sense for clearing
unsold seats, but not for selling all seats, as this will eat into
overall margins for the event.
When you think you have identified the
customer problem, try to validate it with a potential customer to
ensure you have the right positioning.
Tip 2 – A start-up is not a business
There is an old saying that if you
give the same idea to 10 different entrepreneurs, they would each
commercialise the concept in an entirely different way. Particularly
in the early stages, the best you can hope for is a foray into a
number of different entrepreneurial endeavours around your idea.
As an example, in the launching of our
new business planning toolkit, we undertook a number of
entrepreneurial endeavours to determine which of these might become a
viable business. These included: Google Adwords, Display Advertising
Online, Magazine Advertising, Public Relations, distribution via
accounting firms. Until you have identified which of your channels
to market can provide a consistent formula for business success
(Revenues Exceed Costs), you do not actually have a business.
In business start-up phase you are
undertaking a journey to find the business in your idea.
Tip 3 – Iterate Iterate Iterate
Build iteration of your business model
and channels to market into your business plan. Don’t put all your
eggs into one basket. Whilst you might assume that a single
marketing method will deliver results, don’t put all your funds
behind that faith. Keep some funds in reserve for iteration. By
iteration I mean the ability to try many and varied approaches. This
may involve trying different channels to market, different marketing
methods, different product positioning and even changes to the
product or service itself.
Tip 4 – The best product doesn’t
Simply having the “best product”
isn’t enough. People don’t like change. Lets assume for a
minute that you invented a better type of aircraft. How long do you
think this might take to get to market? Will you have the funds to
cross the compliance issues associated with the innovation. Even if
you make it past these hurdles, will customers switch? If you
require changes to airport infrastructure, landing strips or customer
boarding processes, you might find you are in for a very difficult
Don’t assume that just because you
have a “better product’ that you will be successful. There is a
substantial amount of supporting physical and intellectual capital
that goes into making a product or service successful from a business
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