As a business mentor and coach, I get quite a few calls that start with, “I have an idea…” Every great business starts with one simple idea, and yes—sometimes it is actually scribbled on a napkin! In this post I want to take you through a few basics to consider before sharing your big idea.
Once you have your idea, here are the next five steps:
1. Write it out in detail and create some sort of a plan. You may choose something simple like the One-Page business plan, which is great if you already know what you are doing and just need a format. Otherwise, I encourage you to take my CreativeLive class “Turn Your Talent Into a Business” which has taught over 6000 viewers to create the businesses of their dreams.
2. Identify how your business will succeed. For example, more than one person in history had the big idea to fly to the moon. So what? The idea only gained merit when scientists sat together and drafted out a plan for HOW TO DO IT.
3. Prove your concept. If your ideas is to change the way online advertising works, or you have a better way to fly to the moon or to send a manned aircraft to Jupiter, you need to have proof of concept that your idea will succeed. To do this, you need to build some sort of model or prototype, or have a mechanism that shows HOW AND WHY it will work in action.
4. Demonstrate the demand for your product or service. Who needs another way to drink coffee or to deliver razors to your door? Consider Uber. Why did we need another type of taxi service? Think about the appeal of your product or service and be practical about whether it is really needed or not. Here you have to be clear about WHY PEOPLE WANT what you can offer.
5. Determine how your business will make a profit. This step is the one most often overlooked—and it is absolutely crucial if you are seeking investors. Sure, your idea may be prettier than what the competition offers. And yes, you can do it better than the other guys. But will you turn a profit? How much does it cost to produce it, run it, market it and how quickly will it generate income? What does customer acquisition cost? What is the ROI (return on investment)? These are just some of the things you need to know before jumping in with both feet. Realistic numbers are crucial to every thriving new business.
Money likes speed. Any successful Entrepreneur will tell you that you need to verify your plan will work as quickly as you can. If you’re not fast enough, someone else will inevitably come up with the same idea. The winner is the person who implements first.
And please, always protect yourself. Don’t talk about your great idea unless you have some sort of legal protection or you are not actually serious about following through with it. Remember how Facebook started? Zuckerberg didn’t come up with the idea. He was hired as the programmer to make someone else’s idea a reality, and yet he ended up as the billionaire owner. How did he manage to do this? He implemented at lightning speed.
Want to learn more? Please check out the five mistakes entrepreneurs make so you can avoid the same pitfalls and be successful sooner!