Business idea

Business ideas are funny things. Some people can easily come up with dozens of ideas whilst others struggle to ever come up with one. You have probably come to this page because you have an idea for a business in mind but aren’t sure how to convert this idea in to an actual real life business that can make you money.

First of all we need to determine how good your business idea might be. What would your answers be to the following questions:

  • Who would your first three customers be? Actual names of people or businesses, not just a category of people. Family and friends don’t count. Remember a customer is someone who wants to buy your product or service and is also willing and able to pay for it.
  • Who else is doing the same or a similar business or is your idea unique? Contrary to popular belief unique ideas are problematic. Either there is a very good reason why nobody else has done (usually that the idea is not profitable) or if it is feasible, it is expensive and time consuming to educate your customers on your new product. There are of course exceptions, so this is not a deal breaker.

If you don’t yet know exactly who your first customers will be and why they will but from you instead of your oppositions, then you need to work on your idea a bit more.

It is also important to note that business ideas don’t have to be unique, special or amazing to succeed. Often doing something similar to several existing businesses, just a little better is a much better way to start a business.

Secondly you will now need to do some maths and a business plan to test how good your idea might be. Don’t worry, this does not have to be anything complex. It is really more of an exercise to get you to carefully think about your business idea. Writing it down is a useful way to keep your thoughts focused and on topic. Some of the points you need to carefully consider are:

  • Who are your customers?
  • Why will they buy from you?
  • How is your product or service better than the opposition?
  • What are the weaknesses in your product or service?
  • What will it cost you to make each product or provide your service to each customer?
  • What will it cost you to get everything setup and ready for your first customer?
  • What skills will you need to make your product or provide your service?
  • What are the possible obstacles you might face in setting this up and servicing your customers?
  • How many products do you have to sell to make a profit in a month?
  • Why will your customers trust you enough to buy from you?
  • At what price will you be able to sell your product or service.
  • For each of the first 12 months, write down a list of all your costs and expenses to run your business each month including costs to supply the product and to pay your monthly expenses. Remember your first month will probably include special setup costs that you need to set things up.
  • For each of the first 12 months, write down a list of how much you expect to sell. This is a tricky one and you need to do your best to be realistic. Sometimes customers break their promises to buy. Sometimes it takes many months for a customer to decide to change suppliers and trust you. Sometimes customers don’t have enough money to buy your product. Remember that others might not be as excited about your product or service as you are.
  • Check to see in which month you start making profits and if you can last that long with the cash you have.

So if after doing all the above you still believe you have a business idea that can be successful, then the question becomes: Why have you not started? We address some of the most common answers to this in the following pages:

But for someone who is full of viable business ideas or is a serial entrepreneur, it is most likely a combination of the above four and quite possibly all four. In each of the four links above we provide possible solutions to your problem, but when you have more than one of the above reasons not to start your business, you really should consider a managed solution.

When we say a managed solution we mean use someone else to setup and manage your business idea. Someone who has done it before, someone who already has the infrastructure and staff in place. Its almost like an instant business or a business in a box. They will do all the common business tasks like accounting, deliveries, warehousing, collections, packing, processing orders, quoting, invoicing, banking ad so on. Your role will be two fold:

  1. Provide any expertise that is specifically required for your business. So if your business is to make and sell printed coffee cups, you will need to be able to make the first couple of batches of coffee cups yourself and then if its a simple task, you can later train someone to take over. If you have a service business that installs home security systems, you will need to to the installing until you have enough profits to employ and train someone else.
  2. Make the first few sales. Only you know your business idea well, so you have to prove that your product or service will sell. You can then carry on with sales or slowly transfer the role to others.

Other than that your role is to be the company strategist. Basically you will be the boss making most of the big decisions and deciding how your business should run. And you still maintain ownership control of your business idea.

You can find out more details of this managed start up plan here.

If that is not for you, you should consider teaming up with other businesses that can help you with some of the services you require which will help reduce your start up costs and overheads. Take a look at the members section which will try and put you in contact with people who may be able to help.